Refer to the scenario above. Which of the following will happen in equilibrium if Harry is known to be trustworthy?
A) Tom will trust Harry and Harry will cooperate.
B) Tom will trust Harry and Harry will defect.
C) Neither of them will make any money.
D) Only Harry will make money.
A
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When a positive externality exists, the market is said to fail because it overproduces the good associated with the positive externality.
Answer the following statement true (T) or false (F)
If the United States has a current account deficit with England of $1 million, and the Bank of England sells $1 million worth of pounds in the foreign exchange market, then England ________ $1 million of international reserves and its monetary base
________ by $1 million. A) gains; rises B) gains; falls C) loses; rises D) loses; falls
Suppose all firms in a competitive market are currently in both short-run and long-run equilibrium. What impact will a lump sum tax have on each firm in the short run? in the long run?
What will be an ideal response?
Which of the following leads to monopolistic competition?
a. Fluctuation in the price of a product during a particular year b. The variety of styles, flavors, locations, and characteristics associated with a product c. A change in the total number of firms producing an identical product d. Government intervention in the form of license and quality control associated with a product