Answer the next question based on the following payoff matrix for a duopoly. The numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. Firm X? High PriceLow PriceFirm YHigh priceX = $625X = $725??Y = $625Y = $475?Low priceX = $475X = $400??Y = $725Y = $400Refer to the above payoff matrix. If both firms collude to maximize joint profits, the total profits for the two firms will be:
A. $1,250,000.
B. $1,400,000.
C. $1,200,000.
D. $800,000.
Answer: A
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Consider two people involved in a marriage or relationship. If, when one person is caught cheating on their agreement, the other cheats once as a punishment. In this example, then they are using a:
A. tit-for-tat strategy. B. grim-trigger strategy. C. dominant strategy. D. predatory strategy.
Refer to Figure 9.9. At free trade, domestic consumption is
A) 5500; domestic production is 1000; imports are 4500. B) 5000; domestic production is 2000; imports are 3000. C) 4000; domestic production is 4000; imports are 0. D) 2000; domestic production is 5000; imports are 3000. E) 1000; domestic production is 5500; imports are 4500.
A property of an asset that makes it desirable for use as a means of settling debts maturing in the future is a(n)
A) medium of exchange. B) unit of accounting. C) store of value. D) standard of deferred payment.
Suppose a monopoly faces an inverse demand curve of P = 300 ? 10Q and has constant marginal cost of 20. If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?
A. $280 B. $2,240 C. $1,960 D. None of the statements is correct.