The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper. 
If Row Restaurant publishes coupons, Column Cafe would earn the highest profit if it:
A. only offered coupons half of the time.
B. also published coupons.
C. did not publish coupons.
D. chooses either strategy because Column Cafe will have the same profit in either case.
Answer: B
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Suppose a Chinese restaurant routinely provides free fortune cookies to its customers. The economic way of thinking suggests the restaurant is
A) engaging in predatory pricing of its meals. B) attempting to increase its total profit. C) selling Chinese food below cost. D) doing all of the above. E) almost certainly doing none of the above.
A large and growing current account deficit can be an indicator of a potential crisis
Indicate whether the statement is true or false
Most lighthouses are operated by the government because
a. of the free-rider problem. b. lighthouses are no longer valued by society. c. most lighthouses are only tourist attractions in state and national parks. d. shipping companies would not be able to afford maintenance fees for lighthouses.
Exclusion restrictions are said to be imposed in a two-equation simultaneous equations model if it is assumed that:
A. certain exogenous variables do not appear in the first equation and others are absent from the second equation. B. certain endogenous variables do not appear in the first equation and others are absent from the second equation. C. the error terms in each equation is correlated with the exogenous variables. D. the error terms in each equation is uncorrelated with the exogenous variables.