Firms faced with prisoners' dilemma can always make more profits by engaging in opportunistic behavior. Why is this type of behavior NOT commonly found even in oligopolistic markets?
What will be an ideal response?
The prisoners' dilemma describes noncooperative behavior, but in reality most businesses engage in repeat transactions so that cooperation is likely to occur. One cooperative strategy is tit-for-tat behavior.
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There is "too much" steel production if the
A) social costs of steel production are significantly lower than the private costs. B) social benefits of steel production are declining. C) social costs of steel production are significantly higher than the private costs. D) social costs of steel production are declining.
If Canada has an absolute advantage over Denmark in the production of wood, this implies that
a. it requires fewer resources in Canada than in Denmark to produce wood b. the opportunity cost of producing wood in Canada is lower than in Denmark c. Denmark does not benefit by trading with Canada d. Canada should buy wood from Denmark e. Canada does not benefit by trading with Denmark
In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called
The labor force participation rate equals the
A) (number of employed divided by the labor force) × 100. B) (labor force divided by the number of people not in the labor force) × 100. C) (labor force divided by working-age population) × 100. D) (labor force divided by the total population) × 100.