Though Nash games are noncooperative, a cooperative outcome is more likely if
A. the long-run gains are smaller than the short-run gains.
B. firms expect the market relationship to last only for a short time.
C. the long-run gains are greater than the short-run gains.
D. firms can easily monitor the outcomes from rivals' defection.
Answer: C
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Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by three units per hour, then to maximize profits the firm should
A) not hire an additional worker. B) not change the number of workers it currently hires. C) hire another worker. D) There is not enough information to answer the question.
As an option nears its expiration date, the size of the premium approaches
A) zero. B) infinity. C) its intrinsic value. D) an amount which varies, depending on prevailing market interest rates on the expiration date.
Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2014 the CPI was 190. What does this "190" mean?
A) What cost $100 in 1982 on average cost 190 times as much in 2014. B) What cost $100 in 1982 on average cost $190 in 2014. C) What cost $100 in 1982 on average cost 0.19 times as much in 2014 (that is, it cost $19 in 2014). D) What cost $100 in 1982 on average cost $19 more in 2014.
Which of the following is not typically used for qualifying mortgages as prime or subprime?
A. The loan to value ratio B. The borrower's ethnicity C. The borrower's income D. The borrower's credit score