In a repeated prisoner's dilemma, players:
A. always play their dominant strategy.
B. never learn to play their dominant strategies.
C. can sustain cooperation by playing their dominant strategy.
D. can sustain cooperation by employing a tit-for-tat strategy.
Answer: D
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Both the Latin American countries and the sub-Saharan countries have poor economic growth records due to
A) climate. B) geography. C) colonization. D) arbitrary governance. E) indifference from the World Bank.
Refer to Scenario 5.8. Given that the two outcomes are equally likely, Icarus Airlines' expected profit under complete information would be
A) $40 million. B) $90 million. C) $115 million. D) $120 million. E) $125 million.
The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, then the greater the amount of capital in use the:
A. the more an additional unit of capital adds to production. B. less is produced. C. the less an additional unit of capital adds to production. D. less production is wasted.