Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
This game:
A. has no Nash equilibrium.
B. is an ultimatum bargaining game.
C. is a prisoner's dilemma.
D. is not a prisoner's dilemma.
Answer: D
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If the firms in a monopolistically competitive market are earning short-run economic profits, then
a. each existing firm will increase output in the long run as its marginal revenue curve shifts rightward b. each firm will experience an increase in the demand for its output in the long run c. each firm's profit will drop to normal in the long run as its demand curve shifts leftward due to entry of new firms d. barriers to entry will enable them to earn economic profits in the long run e. decreased demand for a key input will reduce that input's price in the long run and lower each firm's average total cost curve
Clark wishes to buy books and pens. Clark's best choice would be: a. choosing a consumption bundle that lies above the budget line
b. choosing a consumption bundle that lies below the budget line. c. choosing the consumption bundle where his highest indifference curve is tangent to the budget line. d. choosing the consumption bundle where his lowest indifference curve first intersects the budget line.
The effect of spreading out the fixed costs outweighing the effect of diminishing returns is illustrated by the ________ average cost curve ________.
A. long-run; decreasing B. long-run; increasing C. short-run; decreasing D. short-run; increasing
One reason that college graduates earn higher wages than non-graduates is because college graduates:
A. acquire additional skills to allow them to work in more industries than non-graduates. B. always work in more dangerous jobs than non-graduates. C. are always more intelligent than non-graduates. D. are less equipped to deal with technological change, as their skills are technology-specific.