The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement. 
For Bagels 'R' Us, ________ is a ________.
A. abiding by the agreement; dominant strategy
B. cheating on the agreement; dominant strategy
C. cheating on the agreement; dominated strategy
D. abiding by the agreement; dominant strategy when Bagel World also abides
Answer: B
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The labor force is defined as the number of people who
A) are employed plus the number of people who are unemployed. B) are available and looking for work but are unable to find employment. C) would like to have a job but have stopped seeking work. D) would like to have a full-time job but are working part time. E) are employed minus the number of people who are unemployed.
Examples of comparative advantage often begin with two countries that each produce the same two goods
Each country is then shown to have a comparative advantage in producing the good it can produce at a lower opportunity cost, and specializes in the production of the good for which it has a comparative advantage. How do these examples prove that both nations are made better off as a result of trade than they would be without trade?
Why would a policymaker risk inflation if workers can just renegotiate their wages?
A) There is a change that workers will not fully anticipated the impact of the policy. B) The policymakers want to look like they are actively involved in the economy. C) Inflation is not a high price to pay in the economy. D) The policymakers do not believe that the workers can renegotiate.
Why do we analyze the steady state in the Malthusian model?
A) Because that is all we know how to do. B) Because there is a non-steady state that is not interesting. C) Because this is the Pareto optimum. D) Because the long run equilibrium of the model is the steady state.