Firms A and B can conduct research and development (R&D) or not conduct it. R&D is costly but can increase the quality of the product and increase sales
The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. A's best strategy is to A) conduct R&D regardless of what B does.
B) not conduct R&D regardless of what B does.
C) conduct R&D only if B conducts R&D.
D) conduct R&D only if B does not conduction R&D.
A
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Over the last 100 years, real GDP per person in the United States has grown at an average rate of approximately 2 percent per year
Indicate whether the statement is true or false
In a world of certainty, the key decisions influenced by the riskless interest rate are
A) risk premiums demanded by investors. B) portfolio decisions. C) diversification decisions. D) consumption versus saving decisions.
The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping
Indicate whether the statement is true or false
The shape of the aggregate demand curve does NOT tell us anything about how the total dollar value of spending will ultimately be divided between output and prices. For this we need
A. information about the standard of living in the country. B. to know how far from the origin the aggregate demand curve is. C. an aggregate supply curve. D. information that only the Consumers' Price Index can provide.