In a repeated game, deterring entry
A) is not possible.
B) is not a rational strategy if money is lost fighting the first potential entrant.
C) may require losing money fighting the first potential entrant.
D) cannot form a subgame perfect Nash equilibrium.
C
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Suppose that there are only two fishermen, Zach and Jacob, who fish along a certain coast. They would each benefit if a lighthouse were built along the coast where they fish. The marginal cost of building each additional lighthouse is $150. The marginal benefit to Zach of each additional lighthouse is 90 - Q, and the marginal benefit to Jacob is 40 - Q, where Q equals the number of lighthouses. What is the efficient number of lighthouses?
What will be an ideal response?
Between 2007 and 2008, the United States economy experienced
A. disinflation. B. deflation. C. inflation. D. a depreciation.
At the time it occurs, external financing of the debt allows the economy to
A. Export more goods and services. B. Consume beyond the production possibilities curve. C. Reduce the size of the national debt. D. Reduce the deficit ceiling.
Suppose the economy is in long-run equilibrium and there is an increase in investment. As a result, real GDP will ________ in the short run, and ________ in the long run
A) increase; increase further B) increase; decrease to its initial value C) decrease; decrease further D) decrease; increase to its initial level