The story of the prisoners' dilemma shows why
a. predatory pricing is clearly not in society's best interest.
b. economists are unanimous in condemning resale price maintenance, since it inevitably reduces competition.
c. oligopolies can fail to act independently, even when independent decision-making is in their best interest.
d. oligopolies can fail to cooperate, even when cooperation is in their best interest.
d
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Within the circular flow model, economists define households as
A) married or engaged couples. B) families living in their own houses. C) individuals or groups living together. D) individuals or groups within the same legally defined family. E) families with at least 2 children.
The study of economics
A) focuses mainly on individual consumers. B) arises from the fact that our wants exceed available resources. C) recognizes that scarcity does not affect rich nations. D) deals mainly with microeconomics.
According to the text, economic decision making refers to:
A) comparing costs and benefits. B) rejecting wish-driven strategies. C) ensuring that wants and needs are matched. D) analyzing demand and supply. E) forecasting.
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease