Economists find that models based on the assumption of rational behavior are robust, because a world in which everyone is rational would function quite similarly to a world in which there are no
a. unexploited profit opportunities.
b. constraints due to scarcity.
c. inefficient markets.
d. barriers to free trade.
a. unexploited profit opportunities.
You might also like to view...
Is the equilibrium efficient?
a. Yes, since they are both maximizing the utility b. No, since they could both get more utility c. One should keep the house clean d. None of the above
For the past several decades, the percentage of national income in the United States allocated to human capital (employees and self-employed workers) has been approximately
a. 20 percent. b. 40 percent. c. 60 percent. d. 80 percent.
If a currency appreciates, a country’s net exports
A. fall and AD increases. B. rise and AD increases. C. fall and AD decreases. D. rise and AD decreases.
Refer to the information provided in Table 14.3 below to answer the question that follows. Table 14.3B's Strategy ?AdvertiseDon't Advertise??A's profit $75 millionA's profit $200 million?AdvertiseB's profit $75 millionB's profit $50 millionA's Strategy????Don'tA's profit $50 millionA's profit $100 million?AdvertiseB's profit $200 millionB's profit $100 millionRefer to Table 14.3. The result of this game is a prisoners' dilemma. In which of the following cases is it most likely that the firms will be able to overcome the prisoners' dilemma?
A. government intervention B. when both firms follow a maximin strategy C. repeated play D. a single interaction