Consider the market for nonalcoholic beers from the previous question. Which of the following is the Bertrand reaction function for Cudweiser?
a. PC = 1 + .033PB
b. PC = 1 - .033PB
c. PC = 1.5 + .075PB
d. PB = 1.5 + .075PC
a
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Because of the adverse selection problem
A) good credit risks are more likely to seek loans causing lenders to make a disproportionate amount of loans to good credit risks. B) lenders may refuse loans to individuals with high net worth, because of their greater proclivity to "skip town." C) lenders are reluctant to make loans that are not secured by collateral. D) lenders will write debt contracts that restrict certain activities of borrowers.
When the cross-price elasticity of demand between two products is positive, the two goods are said to be substitutes
a. True b. False
Which of the following is not among the first steps the textbook recommends be taken to reduce negative externalities?
A) Adjudication
B) More scientific research
C) Negotiation
D) The cultivation of civic virtues
What does it mean for a country to have an absolute advantage in producing a product?
What will be an ideal response?