Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch.
In the equilibrium this game, Tracy chooses the ________ branch, and then Amy chooses the ________ branch.
A. bottom; top
B. top; bottom
C. top; top
D. bottom; bottom
Answer: A
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Indicate whether the statement is true or false
M1 differs from M2 because ________
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The idea of comparative advantage is related to
A) the idea of opportunity cost. B) the idea of absolute advantage. C) using the worker with the most diverse sets of skills. D) engineering efficiency.
After an increase in the demand for construction workers, the market will attain its new long-run equilibrium faster if
A. people ignore the shortage in the short run. B. wages are flexible. C. wages are inflexible, forcing new people to enter the market. D. unions restrict the number of new construction workers.