This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.The game between music stores in the figure shows us that:
A. neither store has a dominant strategy, and so the outcome cannot be predicted.
B. only The Rock Shop has a dominant strategy, and so the outcome cannot be predicted.
C. only MiiTunes has a dominant strategy, and so the outcome cannot be predicted.
D. None of these statements is true.
Answer: D
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Differences among nations in real economic growth rates, real interest rates, and inflation rates will each affect the exchange rates among their currencies
a. True b. False Indicate whether the statement is true or false
The _____ effect states that a lower price level reduces the amount of money people wish to hold. When they lend out their excess savings, the _____ falls causing investment spending to rise and increases the quantity of goods and services demanded
Fill in the blank(s) with correct word
Suppose a bottle of wine produced in France sells for 35 euros. If the exchange rate between euros and dollars is €1 = $1.30, how much will an American pay for the bottle of wine in America?
A. $130.00. B. $45.50. C. $35.00. D. $26.92.
Exhibit 4-2 Supply and demand curves
In Exhibit 4-2, which of the following might cause a shift from S1 to S2?
A. A decrease in input prices. B. A decrease in consumer prices. C. An increase in input prices. D. An increase in consumer income.