Game theory is used to model decisions in situations where the players interact.
a. true
b. false
Answer: a. true
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From 1981 to 2011, the unemployment rate in the United States
A) was always lower than the unemployment rate in Japan. B) almost always equaled the unemployment rate in Canada. C) generally rose while the unemployment rate in the Eurozone fell. D) was generally lower than the unemployment rate in the Eurozone. E) was usually higher than the unemployment rate in Canada.
Eric is maximizing his total utility with choices of two goods: clothes and food. His marginal utility of clothes is 60 and his marginal utility of food is 12 . The price of clothes is $20 . What must be the price of food?
a. $12 b. $6 c. $4 d. $1 e. $0
Suppose that a competitive firm's marginal cost of producing output q is given by MC = 5 + 2q. Assume that the market price of the firm's product is $27. What level of output will the firm produce?
What will be an ideal response?
If firms have rational expectations and if they set prices and wages on this basis, then prices and wages
A. will never be set at market-clearing levels. B. will always be above market-clearing levels. C. will always be at market-clearing levels. D. will, on average, be set at market-clearing levels.