A commitment strategy is an agreement in which players agree to:
A. submit to a penalty in the future if they defect from a given strategy.
B. cooperate in repeated games until someone defects.
C. cooperate before the game begins.
D. None of these is a definition of a commitment strategy.
Answer: A
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The expected real interest rate (r) is equal to
A) nominal interest rate minus inflation rate. B) nominal interest rate minus expected inflation rate. C) expected nominal interest rate minus inflation rate. D) nominal interest rate plus expected inflation rate.
Happy Cows is a perfectly competitive dairy farm that has consistently faced a 50 percent chance of a high demand of $5 and a 50 percent chance of a low demand of $4. The managers of Happy Cows learn that there is now a 50 percent chance of a high demand of $8 and a 50 percent chance of a low demand of $2. All else equal, the change in the high and low demand values makes an accurate forecast
________ valuable to Happy Cows as the firm stands to gain ________ profit from an accurate forecast. A) more; less B) less; less C) less; more D) more; more
The average duration of unemployment tends to be longer, the higher the unemployment rate
a. True b. False Indicate whether the statement is true or false
If the marginal cost curve is below the average variable cost curve, then
A. average variable cost is increasing. B. marginal cost is increasing. C. average variable cost is decreasing. D. average variable cost is constant.