In a repeated prisoner's dilemma, players:
A. always play their dominant strategy.
B. can sustain cooperation by playing their dominant strategy.
C. can sustain cooperation by employing a tit-for-tat strategy.
D. never learn to play their dominant strategies.
Answer: C
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Suppose that quantity demand rises by 10% as a result of a 15% decrease in price. The price elasticity of demand for this good is
a. inelastic and equal to 0.67. b. elastic and equal to 0.67. c. inelastic and equal to 1.50. d. elastic and equal to 1.50.
Indirectly, the government has improved the quality of information available to consumers through
a. the SEC. b. its support for the Internet. c. the Federal Reserve System. d. requiring content labels on food products.
The estimated demand for a good is
= 4800 - 16P - 0.65M - 1.5PRwhere Q is the quantity demanded of the good, P is the price of the good, M is income, and PR is the price of related good R. The good is
A. an inferior good since the coefficient on M is negative. B. a normal good since the coefficient on M is greater than one (in absolute value). C. a normal good since the coefficient on PR is negative. D. an inferior good since the coefficient on PR is negative. E. none of the above
Low Bar Steel factory produces runoff that affects the water supply in one way or another for more than 100,000 households and businesses. Why would it be impractical for the Coase theorem to apply to a workable solution in this case?
a. Potential benefits outweigh the costs. b. There is no externality. c. There are too many transactors. d. Property rights are clearly defined.