Refer to the information provided in Table 14.5 below to answer the question that follows.
Table 14.5B's Strategy
?AdvertiseDon't Advertise??A's profit $200 millionA's profit $400 million?AdvertiseB's profit $200 millionB's profit $100 millionA's Strategy????Don'tA's profit $100 millionA's profit $150 million?AdvertiseB's profit $400 millionB's profit $150 millionRefer to Table 14.5. What is the Nash equilibrium in the game?
A. (Advertise, Advertise)
B. (Advertise, Don't Advertise)
C. (Don't Advertise, Don't Advertise)
D. (Don't Advertise, Advertise)
Answer: A
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If we say that a price is too high to clear the market, we mean that:
A. the price of the good is likely to rise. B. quantity supplied exceeds quantity demanded. C. quantity demanded exceeds quantity supplied. D. the equilibrium price is above the current price.
Nominal GDP is defined as the:
A. Value of output in current dollars. B. Dollar value of services but not goods. C. Output produced by domestically owned factors of production regardless of where the factors are located. D. Value of output in constant prices.
The labor supply curve is generally considered to be upward-sloping because the opportunity cost of leisure:
A. increases as wages get higher. B. has nothing to do with wages. C. decreases as wages get higher. D. remains unchanged as wages get higher.
Answer the following questions true (T) or false (F)
1. An increase in the real interest rate will decrease consumption and investment. 2. Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy. 3. Financial markets and financial intermediaries comprise the financial system.