The ability to make counteroffers transforms bargaining from a game in which ___________ trumps everything to a game in which ____________ is the winning strategy.
A. patience; first-mover advantage
B. commitment strategy; self-interested behavior
C. first-mover advantage; patience
D. first-mover advantage; cooperation
C. first-mover advantage; patience
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Suppose the government wants to finance housing for low-income families by placing a tax on the purchase of luxury homes. Assume the government defines a luxury home as a home that is purchased for at least $1 million
This tax is consistent with the A) social equity principle. B) benefits-received principle. C) ability-to-pay principle. D) horizontal-equity principle.
Refer to the above figures. A negative externality exists that has not been corrected. Price and quantity will be
A) P1 and Q1. B) P2 and Q2. C) P3 and Q3. D) P4 and Q4.
A sustained decrease in the price level is known as deflation
a. True b. False Indicate whether the statement is true or false
Stan buys a 1966 Mustang for $2,000, planning to restore and sell the car. He goes on to spend $8,000 restoring the car. At this point he can sell the car for $9,000. As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine the car would sell for $12,000. Stan should
a. complete the repairs and sell the car for $12,000. b. sell the car now for $9, 000. c. never try such an expensive project again. d. be indifferent between (i) selling the car now and (ii) replacing the engine and then selling it.