Refer to Figure 4.2. A Nash equilibrium exists
A) only where all three players go to the movie theater.
B) only where all three players go to the bowling alley.
C) where all three players go to the movie theater and where all three players go to the bowling alley.
D) These is no Nash equilibrium in this game.
C
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Explain the concept of diminishing returns
What will be an ideal response?
A rational expectation of the inflation rate is
A) always correct. B) a forecast based on the forecasted actions of the Fed and other relevant determinant factors. C) a forecast based only on the historical evolution of inflation over the last 100 years. D) an expected inflation rate between 5 percent and 10 percent. E) an expected inflation rate between 1 percent and 5 percent.
One result of voters' rational ignorance is that
a. cyclical majorities are more common b. vote trading is common c. majority rules d. special interests often dominate legislation e. members of Congress go along with whatever their constituents want
People tend to remain in those occupations that require continuous time and financial commitments to remain productive
a. True b. False Indicate whether the statement is true or false