Refer to Figure 12.7. If Fred's profit in the top rectangle were 1,300 instead of 500, then the path of the game would be:
A. Fred chooses a small quantity and Barney enters.
B. Fred chooses a large quantity and Barney enters.
C. Fred chooses a small quantity and Barney stays out.
D. Fred chooses a large quantity and Barney stays out.
Answer: A
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A collusive agreement between two duopolists is similar to the prisoners' dilemma because in both games
A) the best outcome is always achieved. B) each players strategy depends on what the other player does. C) the Nash equilibrium is not the best outcome for the players. D) All of the above answers are correct.
In the 1990s, many people had rising incomes. At the same time, there was a rise in the cost of lumber. This would cause the demand for houses to _________ and the supply for houses to_________
a. Increase, increase b. Increase, decrease c. Decrease, increase d. Decrease, decrease
The expansion path for a homothetic production function:
a. is a straight line through the origin with a slope greater than one if w > v. b. is a straight line through the origin with a slope less than one if w < v . c. is a straight line through the origin though its slope cannot be determined by w and v alone. d. has a positive slope but is not necessarily a straight line.
Which of the following is correct?
a. The Federal Reserve has 14 regional banks. The Board of Governors has 12 members who serve 7-year terms. b. The Federal Reserve has 14 regional banks. The Board of Governors has 7 members who serve 14-year terms. c. The Federal Reserve has 12 regional banks. The Board of Governors has 12 members who serve 7-year terms. d. The Federal Reserve has 12 regional banks. The Board of Governors has 7 members who serve 14-year terms.