A Nash equilibrium in the duopoly game
A) means that one player has greater market power.
B) occurs when each player takes the best possible action regardless of the strategy chosen by other firms.
C) will always lead to equilibrium in which the firms' total profit is the largest.
D) can occur only if firms cooperate with each other.
E) means that a firm must be able to determine its actions and the actions of its competitor.
B
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Suppose a market has only one seller and only one buyer of a good. The buyer has a reservation value of $25 and the seller has a reservation value of $15. The market price of the good is determined at $20
If they trade, the social surplus will be ________. A) $10 B) $20 C) $40 D) $60
All of the following factors will affect the supply of shoes except one. Which will not affect the supply of shoes?
a. higher wages for shoe factory workers b. higher prices for leather c. a technological improvement that reduces waste of leather and other raw materials in shoe production d. an increase in consumer income
Let's assume that cloth-making (labor-intensive) and farming (land-intensive) are the only two sectors of production in a country. If this country is labor-abundant, and if trade corresponds to the Heckscher-Ohlin theory, which of the following groups will gain in the short run, but lose in the long run, from the opening of trade?
A. Domestic landowners in the domestic cloth-making sector B. Foreign workers in the foreign cloth-making sector C. Foreign landowners in the foreign farming sector D. Domestic landowners in the domestic farming sector
The figure below shows a situation where the producers of Good X are forming an international cartel. Here, MR = Marginal Revenue, and MC = Marginal Cost. The cartel will set a monopoly price for its output.
A decrease in the global market share of the cartel would lead to a
A. leftward shift of the cartel demand curve and a fall in cartel output. B. rightward shift of the cartel marginal-cost curve and a rise in cartel output. C. rightward shift of the cartel demand curve and a fall in cartel output. D. leftward shift of the cartel marginal-cost curve and a rise in cartel output.