Refer to Table 14-3. What is the Nash equilibrium in this game?
A) In the Nash equilibrium both Saudi Arabia and Nigeria produce a low output and earn a profit of $100 million and $20 million respectively.
B) In the Nash equilibrium Saudi Arabia produces a low output and earns a profit of $80 million and Nigeria produces a high output and earns a profit of $30 million.
C) In the Nash equilibrium both Saudi Arabia and Nigeria produce a high output and earn a profit of $60 million and $20 million respectively.
D) There is no Nash equilibrium.
B
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In 1985 a desert community stopped pumping water from a 1000 foot well because it had run dry. In 2005 the price of water doubled. The community then drilled the well deeper and started pumping again. In this community,
A. higher water prices can reduce quantity demanded but cannot increase quantity supplied. B. the supply of water is perfectly inelastic because it is a finite resource. C. water production is characterized by increasing opportunity costs. D. markets cannot reach equilibrium because there is a persistent shortage of water.
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Which of the following expresses 5.5%?
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