Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right. At the extreme right end, all 100 voters lie to the left. 
Suppose Candidate X is running against Candidate Y. If Candidate Z enters the race:
A. all of the voters who were going to vote for Y will now vote for Z.
B. most of the voters who were going to vote for Y will now vote for Z.
C. approximately half of the voters who were going to vote for X will now vote for Z.
D. X will win because Y and Z will be competing for the same voters.
Answer: B
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When the United States exports goods and services to France, there is an increase in the
A) demand for dollars. B) supply of French francs. C) supply of dollars. D) U.S. capital account balance. E) U.S. official settlements account balance.
Refer to Figure 3.5. Answer the following questions about the game represented in the figure:
a. What type of game is represented by the payoff matrix? b. Does Donald have a dominant strategy, and if so, what is it? c. Does Donald have a dominant strategy, and if so, what is it? d. What is the cooperative solution? e. What is the Nash equilibrium?
A decrease in supply will increase prices least when demand is
A. perfectly inelastic. B. unit elastic. C. elastic. D. inelastic (but not perfectly inelastic).
Macroeconomics can best be described as the:
A. analysis of how a consumer tries to spend income. B. study of the large aggregates of the economy or the economy as a whole. C. analysis of how firms attempt to maximize their profits. D. study of how supply and demand determine prices in individual markets.