Answer the following statements true (T) or false (F)
1) Most games that managers face are one-shot games.
2) Managers of firms in a finitely repeated pricing game who want to engage in tacit collusion should consider methods to create a chance that the game will continue beyond the final period.
3) The credibility of an announcement by a firm's rival depends on how closely the firm's interests align with its rival.
4) If the manager of Propane R US wants to enhance the credibility of a threat it made to its rival firms, the managers of Propane R Us should keep their rivals in the dark about their planned actions.
5) It is optimal for a manager to make unpredictable decisions when a rival firm can benefit at the expense of the manager's decisions.
1) FALSE
2) TRUE
3) TRUE
4) FALSE
5) TRUE
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Consider the following:
(i) Suppose the government imposes new regulations that force tire manufacturers to incur some one-time expenses for factory safety improvements. Will the new regulations raise the price of tires? Why or why not? (ii) Suppose the government imposes new regulations that force tire manufacturers to adopt cleaner production methods that raise the production cost by $10 per tire. Will the new regulations raise the price of tires? Why or why not?
If the Fed wants to lower the nominal interest rate in the short run, the Fed ________ the growth rate of the quantity of money
A) raises B) lowers C) first lowers and then raises D) does not change E) None of the above answers is correct because the premise of the question is wrong since the Fed cannot affect the nominal interest rate, only the real interest rate.
When the price of beef rises, consumers switch consumption to substitutes such as chicken and fish, thereby decreasing the demand for beef
Indicate whether the statement is true or false
A popular video program used to teach economics to primary school children defines opportunity cost as "what you give up to get something." In light of your understanding of opportunity cost, how would you modify this definition?