A commitment strategy is an agreement in which players agree to:
A. submit to a penalty in the future if they defect from a given strategy.
B. cooperate before the game begins.
C. cooperate in repeated games until someone defects.
D. None of these is a definition of a commitment strategy.
A. submit to a penalty in the future if they defect from a given strategy.
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In the principal-agent relationship, the agent is
A) the owner of a resource that has hired another party to act on his behalf. B) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner. C) the person who is placed in control over resources that are not his own, with a contractual obligation to use these resources in the interests of some other party. D) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf.
It is advisable to use clustered standard errors in panel regressions because
A) without clustered standard errors, the OLS estimator is biased B) hypothesis testing can proceed in a standard way even if there are few entities (n is small) C) they are easier to calculate than homoskedasticity-only standard errors D) the fixed effects estimator is asymptotically normally distributed when n is large
Assume a subsidy to buyers has been enacted in the market in the graph shown. With the subsidy, the buyers buy ________ units and pay ________ for each of them.
A. 100; $46 B. 100; $30 C. 150; $24 D. 150; $40
The marginal utility of the first cup of coffee that Tom drinks in the morning is worth $2.00. The marginal utility of the 9th cup of coffee he drinks is positive while the marginal utility of the 10th cup of coffee he drinks in the morning is worth $0. This implies that at a price of $0, Tom would drink
A. at most 10 cups of coffee per morning. B. more than 10 cups of coffee per morning, but the actual number is indeterminate from this information. C. an infinite number of cups of coffee each morning. D. zero cups of coffee per morning.