Prisoner's dilemma games imply that cooperative behavior between two people or two firms always breaks down. But reality teaches us that people and firms often cooperate successfully to achieve their goals. Why do the results from prisoner's dilemma
games fail to predict real-world results?
A) Prisoner's dilemma games do not permit people or firms from reneging on agreements, which often occurs in real-word situations.
B) The prisoner's dilemma does not apply to most business situations that are repeated over and over.
C) Prisoner's dilemma games predict the behavior of people and firms that engage in illegal activity; most people and firms do not resort to illegal activity.
D) Most real-world situations involve more than two people or firms; the prisoner's dilemma is only applicable to situations that involve two parties.
Answer: B
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The above figure shows the market for apples. If a consumer group convinces the government to set a maximum price of $2 per pound, then
A) 300 pounds of apples will be sold at $2. B) no apples will be supplied. C) no apples will be demanded. D) there will be a shortage of 100 pounds of apples.
If the economy is producing Natural Real GDP, then the
A) current unemployment rate is greater than the natural unemployment rate. B) current unemployment rate is less than the natural unemployment rate. C) economy is at full employment. D) economy is operating at the natural unemployment rate. E) c and d
A prepaid hospital plan created by Baylor Hospital for a group of Dallas public school teachers in 1929 is considered the forerunner of what was later called:
a. Blue Shield. b. the health maintenance organization. c. major medical insurance. d. managed care. e. Blue Cross.
Some nations benefit absolutely from abandoning their monetary policy and control of their currency because:
A) their monetary policy permitted high inflation under pressure from political interests that would not be present under a common currency arrangement. B) they did not have sufficient currency in their own nation to support a higher GDP. C) they had a strong currency, which hurt their exports. D) the central bank would keep the money supply under tight control, which is not good for economic expansion and jobs.