Refer to the normal-form game of advertising shown below.Firm AFirm B??AdvertiseDo Not Advertise?Advertise$0,$0$175,$10?Do Not Advertise$10,$175$125,$125Suppose there is a 50 percent chance that the advertising game depicted in Figure 10-17 will end next period. The collusive agreement {(not advertise, not advertise)} is:
A. unsustainable since $175 < $25.
B. sustainable since $175 < $250.
C. sustainable since $20 > $50.
D. unsustainable since $350 > $50.
Answer: B
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A) 0.04 units of a wristwatch B) 4 wristwatches C) 25 wristwatches D) 40 wristwatches
A quota is
A) a government-imposed restriction on the quantity of a specific good that can be imported into a country. B) a tariff imposed on goods that are dumped into the home country. C) a tariff imposed on goods that are subsidized by their domestic governments and exported to other countries. D) a tariff based on the value of the imported good.
When we consider our savings, interest rates _________ and inflation rates ___________ the value.
A. increase; decrease B. decrease; increase C. increase; increase D. have no real effect; decrease
Which of the following is a function performed by market prices?
a. Market prices communicate information to buyers and sellers. b. Market prices coordinate the decisions of buyers and sellers. c. Market prices motivate entrepreneurs to produce those products that are currently most desired relative to their costs of production. d. All of the above are functions performed by market prices.