This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.If Joe and Sarah are faced with the game in the figure shown, we can see that:
A. neither student has a dominant strategy.
B. Sarah has a dominant strategy, but Joe does not.
C. Joe has a dominant strategy, but Sarah does not.
D. both students have a dominant strategy.
Answer: D
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The financial market events of September and October 2008 ________
A) sparked a sharp widening of the credit spread B) signalled the success of the policy response to the financial crisis C) reduced some of the uncertainty that had paralyzed financial markets D) resulted from the federal funds rate having fallen below zero
Refer to Figure 8.1. The profit-maximizing output is
A) 30. B) 54. C) 60. D) 67. E) 79.
Which of the following would likely cause aggregate demand to shift to the left?
A. Higher interest rates discouraging borrowing B. Higher tariffs on all imports into the United States C. Greater consumer confidence about the future D. All of these would likely cause aggregate demand to shift to the left.
Assume that production of a good generates external benefits for others. The equilibrium price of the good will be ____ and the equilibrium quantity ____ for efficient resource allocation
a. too high; too high. b. too high; too low. c. too low; too high. d. too low, too low.