Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies. The dominant strategy for Acme is to ________________
Fill in the blank(s) with the appropriate word(s).
Answer: produce a good quality product, and the dominant strategy for Pinnacle is to produce a good quality product.
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When the Fed ________ the federal funds rate, other short-term interest rates ________ and the exchange rate ________
A) lowers; rise; rises B) raises; fall; rises C) raises; rise; rises D) raises; rise; falls E) lowers; rise; falls
__________ are most likely to raise the eyebrows of antitrust officials while ______ are not
a. Price discriminators; predatory pricers b. Conglomerate mergers; vertical mergers c. Horizontal mergers; conglomerate mergers d. Low Herfindahl-Hirschman indices; high Herfindahl-Hirschman indices e. Patent sales; patent purchases
If the government uses expansionary monetary or fiscal policies to counter the output-effects of cost-push inflation, then the economy is likely to experience:
A. A decline in nominal wages B. An inflationary spiral C. A recession D. Disinflation
Markets
A) rely on voluntary exchanges of goods, services, or resources B) refer to situations where almost all exchanges take place involuntarily. C) are based on extensive price controls imposed by a ruling authority. D) promote quantity determination free from the forces of demand and supply.