Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900. You may find it easier to answer the following questions if you fill in the payoff matrix below. 
width="383" />For Joe, keeping his price at $3 per gallon is a:
A. profit-maximizing strategy.
B. dominated strategy.
C. revenue-maximizing strategy.
D. dominant strategy.
Answer: B
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If you take out a mortgage with a nominal interest rate of 8% and you expect the inflation rate to be 2%, but the actual inflation rate turns out to be 8%, then you end up paying a real interest rate of
A) 0%. B) 1%. C) 2%. D) 6%.
Codetermination refers to
a. allowing worker participation but only at the shop floor. b. allowing representatives of labor on management boards. c. turning trade unions into company unions. d. the alliance between government and labor unions in Germany. e. all of the above.
Lower interest rates
A. Reflect a lower opportunity cost of money. B. Reflect a higher opportunity cost of money. C. Raise the future value of current dollars. D. Lower the present value of future payments.
_________________ banks are examined by the Office of the Comptroller of the Currency.
Fill in the blank(s) with the appropriate word(s).