The Nash equilibrium in a Bertrand game in which firms produce perfect substitutes and have equal marginal costs is:
a. efficient because all mutually beneficial transactions will occur.
b. efficient because of the free entry assumption.
c. inefficient because some mutually beneficial transactions will be foregone.
d. inefficient because of the uncertainties inherent in the game.
a
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
In the long run, inflation is caused by
A) aggressive labor unions. B) greedy monopolists. C) growth in the money supply. D) global warming.
A person starts practicing poisonous snake charming after signing a contract with a health insurance company. This is an example of
A) moral hazard. B) adverse selection. C) signaling. D) screening.
Your textbooks gives several examples of quasi experiments that were conducted. The following is not an example of a quasi experiment:
A) labor market effects of immigration. B) effects on civilian earnings of military service. C) the effect of cardiac catheterization. D) the effect of unemployment on the inflation rate.