When an oligopolist chooses a maximin strategy, how is that helpful and what is being assumed about the other players?
What will be an ideal response?
A player chooses a maximin strategy to maximize the minimum gain it can earn. It assumes that the opposition will play the strategy that will be the most harmful to one's own payoff potential.
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As a share of total national income, government spending generally has
A) been constant over the last fifty years. B) increased over the last fifty years. C) decreased over the last fifty years. D) increased until ten years ago, and then decreased steadily.
In the United States, before OPEC increased the price of crude oil in 1973, there was
a. no price ceiling on gasoline. b. a nonbinding price ceiling on gasoline. c. a binding price ceiling on gasoline. d. a nonbinding price floor on gasoline.
Because neoclassical economists assume that people are rational decision makers, they:
A. are able to make better predictions about economic behaviors and outcomes. B. ignore the mental processes by which these decisions are made. C. believe that people never make suboptimal decisions. D. believe it is best to limit the number of options people have available.
In the case of leisure, the substitution effect implies that:
A) when the price of leisure increases, people will work more. B) when the price of leisure increases, people will work less and relax more. C) if people tend to work more and relax less, the price of leisure increases. D) if people tend to work more and relax less, the price of leisure decreases.