Refer to the information provided in Table 14.6 below to answer the question that follows.
Table 14.6B's Strategy
?AdvertiseDon't Advertise??A's profit $150 millionA's profit $400 million?AdvertiseB's profit $150 millionB's profit $100 millionA's Strategy????Don'tA's profit $100 millionA's profit $200 million?AdvertiseB's profit $400 millionB's profit $200 millionRefer to Table 14.6. Firm A?s dominant strategy is
A. dependent on what Firm B does.
B. to advertise.
C. to not advertise.
D. indeterminate from this information, as no information is provided on Firm A?s risk preference.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. Nonexcludability refers to the possibility that the benefits of consumption can be shared. 2. The market demand for a public good such as environmental quality is found as the horizontal sum of all the individual demands for that good. 3. If the market for a public good is comprised of two consumers, 1 and 2, who have individual demands of p1 = 100 – 0.2QD and p2 = 250 – 0.5QD, then the market demand function would be P = 350 – 0.7QD. 4. If the third-party effects of a good generate benefits to a third party, it is a positive externality. 5. If MSC = 40.0 + 0.25Q, and MPC = 40.0 + 0.14Q, then production is associated with an externality specified as MEC = 40.0 + 0.36Q.
Which of the following people came close to abolishing scarcity in their regions some years ago?
A) Major Kwame Kilpatrick in Detroit B) President Bill Clinton in the U.S C) Governor Sarah Palin in Alaska D) All of the above. E) None of the above.
At a competitive equilibrium with no externalities, taxes, subsidies, public goods, common resources, or high transactions costs, which of the following occurs?
i. an efficient outcome ii. definitely a fair outcome when judged by the fair-results approach iii. marginal cost equals marginal benefit iv. producer surplus equals consumer surplus A) i and iii B) i, ii and iii C) ii and iii D) i, ii, iii and iv E) only i
Refer to the figure above. If the economy of Barylia opens up to free trade, then which of the following statements is true?
A) Barylia will start importing calculators. B) Barylia will start exporting calculators. C) Domestic consumers will purchase a greater quantity of calculators than before. D) The production and purchase of calculators within Barylia will remain the same as before.