In the game shown below, firms 1 and 2 must independently decide whether to charge high or low prices.Firm OneFirm Two??High PriceLow Price?High Price(10,10)(5,-5)?Low Price(5,-5)(0,0)Which of the following are the Nash equilibrium payoffs (each period) if the game is repeated 10 times?
A. (10, 10)
B. (0, 0)
C. (-5, 5)
D. (5, -5)
Answer: A
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The amount of time elapsed since a price change impacts the elasticity of demand because as more time passes,
A) people can find more substitutes, and so the elasticity of demand decreases. B) people can find more substitutes, and so the elasticity of demand increases. C) people's incomes will increase, and so the elasticity of demand decreases. D) the good's price will have a chance to return to its previous level.
In 1970s the federal government imposed price controls on natural gas. Which of the following statements is true?
A) These price controls caused a chronic excess supply of natural gas. B) Consumers gained from the price controls, because consumer surplus was larger than it would have been under free market equilibrium. C) Producers gained from the price controls because producer surplus was larger than it would have been under free market equilibrium. D) This episode of price controls was unusual, because it resulted in no deadweight loss to society.
Government decisions about the level of taxation and public spending are called:
A. fiscal policy. B. monetary policy. C. congressional policy. D. legislative budgeting policy.
A reserve requirement of 10% implies a money multiplier of 10 and a reserve requirement of 15% implies a money multiplier of 15
a. True b. False Indicate whether the statement is true or false