Answer the following statement(s) true (T) or false (F)
1. The Stackelberg equilibrium of a sequential game must also be a Nash equilibrium.
2. In a sequential game, guaranteed commitment to a strategy will make a player worse off.
3. A merger between Gateway, a manufacturer of computers, and Logitech, a manufacturer of components for computers, would be an example of horizontal integration.
4. The Sherman Act of 1890 and the Clayton Act of 1914 gave courts the power to prevent mergers that reduce competition and provided clear criteria to apply in determining when a merger would do so.
5. Social welfare consequences are ambiguous when two or more manufacturers merge to take advantage of economies of scale.
1. False
2. False
3. False
4. False
5. True
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Mpc + mps =
A) 0. B) 0.5. C) 1. D) 100.
In a common-value auction
a. No bidder knows what the exact value of the item being auctioned b. Each bidder has only an estimate of the value of the item c. The value is the same for each bidder d. All of the above
Points that lie outside the production possibilities curve are ________, and points that lie inside the production possibilities curve are ________.
A. attainable; unattainable B. inefficient; efficient C. efficient; inefficient D. unattainable; attainable
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher