Something that changes incentives so as to make otherwise empty threats or promises credible is called a:
A. strategic device.
B. dominant strategy.
C. Nash equilibrium.
D. commitment device.
Answer: D
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One of the major motivations for labor resistance to productivity enhancing changes in a production process is the resulting threat to job security
Indicate whether the statement is true or false
General Motors was able to gain advantage over Ford in the 1920s primarily because:
a. the latter failed to adapt its product policy and organization structure to meet the demands of the changing market. b. the former had always been an M-form and better managed organization. c. the latter charged higher prices for its cars than General Motors. d. the former was vertically integrated with better control over its input production than Ford.
For two individuals who engage in the same two productive activities, it is impossible for one of the two individuals to
a. have a comparative advantage in both activities. b. have an absolute advantage in both activities. c. be more productive per unit of time in both activities. d. gain from trade with each other.