In a Nash equilibrium, which of the following constrains an individual when he optimizes?
a. The market prices.
b. His tastes.
c. The actions of other individuals.
d. Nothing-the individual has no constraints in a Nash equilibrium.
c. The actions of other individuals.
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The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. Which of the following statements is TRUE?
A) This person has diminishing marginal utility of wealth. B) This person is not risk averse. C) Risky situations cause this person no loss of utility. D) None of the above are correct.
When consumers cannot tell the difference at the time of sale between high-quality products and those with defects, strong sales of the low-quality products will tend to depress price and drive the high-quality products from the market. Economists call this
a. the curse of advertising. b. the imperfect information problem. c. the brand name problem. d. an open-access resource.
The rule of 70 estimates how long it will take a country to:
A. achieve zero inflation. B. reach its maximum production capacity. C. double its real GDP per capita. D. double its output.
If a man marries his hired housekeeper, the value of GDP
a. rises b. falls c. is unchanged d. rises, but the value of national income falls e. falls, but the value of national income rises