Which of the following is evidence of a surplus of bananas?
A) The price of bananas is lowered in order to increase sales.
B) Firms raise the price of bananas.
C) The equilibrium price of bananas rises due to an increase in demand.
D) The quantity of bananas demanded is greater than the quantity supplied.
A
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The only two firms in a market are trying to decide what price to charge. The payoff matrix for this duopoly game is shown above. The payoffs are thousands of dollars of economic profit. Which of the following statements is correct?
A) If the firms play this game repeatedly, one would end up charging $20 and the other $10. B) If the firms cooperate, they could both earn $55,000 in economic profit. C) The Nash equilibrium in this game is for both firms to set P = $20 because that maximizes their combined profit. D) Firm B's strategy is to always set P= $20 because that gives Firm B the highest possible profit. E) If Firm B sets P = $20, then Firm A will maximize its profit by setting its P = $20.
The "metering" scheme refers to
a. Discriminating consumers through the amount of product bought b. Giving away core technology and making up for it through higher margins on secondary sales c. An indirect method of price discrimination d. All of the above
Each point on a production possibilities curve shows ____________ .
a. efficient utilization of resources. b. underutilization of resources. c. the potential for future growth. d. the relationship of shortage to scarcity.
Which of the following would shift the AE2 curve back down to the position of AE1?
a. a decrease in the interest rate
b. an increase in real wealth
c. pessimistic economic expectations
d. optimistic consumer expectations