According to the figure shown, Starbucks:
This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.
A. has a dominant strategy to expand.
B. has a dominant strategy not to expand.
C. has first-mover advantage.
D. should wait to see what Dunkin Donuts is going to do.
C. has first-mover advantage.
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Runs on banks occur when
A) banks keep 100 percent of their deposits on hand. B) depositors are confident that the bank will not go bankrupt. C) banks make an unusually high number of profitable loans. D) many depositors attempt to withdraw their funds simultaneously.
Which of the following is an example of a monetary policy?
A) The federal government increases income tax rates on people earning more than $250,000. B) The duration of unemployment benefits is extended to 99 weeks. C) The Federal Reserve increases interest rates. D) Congress authorizes a cut in spending on education.
A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon, it sold 33% less milk. Since everything else remained the same, we would say the
a. demand for milk is perfectly elastic b. demand for milk is elastic c. demand for milk is perfectly inelastic d. demand for milk is unitary elastic e. law of supply does not apply in this situation
"Stagflation" refers to the unwelcome combination of
a. inflation and rising prices. b. deflation and unemployment. c. inflation and unemployment. d. inflation and expansion.