"A Nash equilibrium occurs when both parties to a game end up worse off as a result of the decisions that are made." Is the previous definition of a Nash equilibrium correct or incorrect?
What will be an ideal response?
The definition is incorrect. A Nash equilibrium is an equilibrium in which each player takes the best possible action given the action of the other player.
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With only two goods, if the income effect is in the same direction as the substitution effect then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.
Which of the following statements is true?
a. A less developed country (LDC) is a country with a low GDP per capita, low levels of capital, and uneducated workers. b. The vicious circle of poverty exists because GDP must rise before people can save and invest. c. LDCs are characterized by rapid population growth and low levels of investment in human capital. d. All of these.
The rate at which one input can be traded for another at a point along the production possibilities frontier is called the
A. marginal rate of transformation. B. marginal rate of technical substitution. C. output price ratio. D. input price ratio.
If Abigail can produce 4 wireless earbuds or 3 smartphones in a day, while Jacob can produce 1 wireless earbud or 2 smart phones, then it is correct to state that
A. Jacob has an absolute advantage in smartphones. B. Abigail has a comparative advantage in producing smartphones. C. Abigail has an absolute advantage in producing wireless earbuds but not smartphones. D. Jacob has a comparative advantage in smartphones.