Consider Figure 8.9. The outcome of the game will be that:
A. both choose a high price.
B. both choose a low price.
C. Becky chooses a high price and David chooses a low price.
D. David chooses a high price and Becky chooses a low price.
Answer: B
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Which of the following statements is true?
A) Empirical arguments can be supported without the use of data. B) Using a large data set will strengthen the force of an empirical argument C) Using fewer observations will strengthen the force of an empirical argument. D) The number of observations used does not affect the strength of an empirical argument.
Corrective taxes are often difficult to implement because _____
a. those affected by the externality are often loathe to use political means to implement the tax b. those creating the externality threaten to shut down c. those who suffer from the externality refuse to talk about it d. the creator of an externality will use political means to try to prevent the tax
When the marginal tax rate equals the average tax rate, the tax is
a. proportional. b. progressive. c. regressive. d. egalitarian.