The prisoners' dilemma is a game in which
A) the dominant strategy for all participants is the best outcome no matter what the other side does.
B) the dominant strategy is to cooperate.
C) only one of the firms is able to make above-normal profits.
D) each firm, in making decisions on the basis of its own self-interest, also makes decisions that benefit the group as a whole.
Answer: A
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The basic formula for the price elasticity of demand is
A. absolute decline in price/absolute increase in quantity demanded. B. percentage change in price/percentage change in quantity demanded. C. absolute decline in quantity demanded/absolute increase in price. D. percentage change in quantity demanded/percentage change in price.
The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When 400 pounds of coffee are produced and consumed in Kaffenia each day, that is
A) more efficient than when 300 pounds are produced and consumed because more is always better than less. B) inefficient because the marginal social benefit exceeds the marginal social cost. C) inefficient because the marginal social cost of the 400th pound exceeds its marginal social benefit. D) inefficient because the opportunity cost of producing more coffee exceeds its marginal social benefit.
Since the 1970s, the Phillips curve has:
a. remained stable. b. moved in a clockwise direction. c. been unstable. d. been used as a reliable model to guide public policy.
Public goods, when left to the private market will be:
A. oversupplied. B. overconsumed. C. underconsumed. D. undersupplied.