The above figure shows the payoff for two firms, A and B, that must each choose to sell either at a high or low price. Determine the dominant strategies for each firm (if any) and the Nash equilibria (if any)
What will be an ideal response?
For both firms the dominant strategy is to price low. Thus, the Nash equilibrium is for both firms A and B to price their product low. Note that the total profit is less than if they had both priced the product at a high price.
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The non-income determinants of consumption include all of the following EXCEPT
A) real wealth. B) the interest rate. C) stock of assets owned by household. D) innovation.
Which of the following would not appear on a firm's accounting statement?
a. sunk costs b. fixed costs c. explicit costs d. implicit costs e. insurance costs
The CEO of Coffman Enterprises wants to export products to foreign markets. However, top executives at Coffman are concerned that the firm will face fierce competition from foreign rivals because Coffman lacks significant core competencies. The executives are most likely worried that Coffman lacks ________.
A) capital advantages B) internalization advantages C) location advantages D) ownership advantages
Automatic stabilizers stabilize the level of real GDP because:
A. Congress quickly changes spending and tax revenue. B. federal expenditures and tax revenues change as the level of real GDP changes. C. the spending and tax multiplier are constant. D. wages are controlled by the minimum wage law.