All of the following are characteristics of a chicken game except
A) each player has a tough strategy and a weak strategy.
B) coordination occurs when both players either play their tough strategies or both players play their weak strategies.
C) each player prefers the Nash equilibrium corresponding to his or her tough strategy.
D) each player prefers a different Nash equilibrium.
B
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Whenever average cost is increasing, marginal cost must also be increasing.
Answer the following statement true (T) or false (F)
In which of the following auction types do participants have substantial information about competitors' bids?
A) Dutch auction B) sealed-bid second-price auction C) sealed-bid first-price auction D) English auction
When a resource is being depleted and becomes scarce, the market’s way of encouraging conservation is for the price of the resource to rise, without any government intervention.
Answer the following statement true (T) or false (F)
Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. Which of the following is true?
A) Both 10,000 and 30,000 are economically inefficient rates of output.
B) If the price of iced tea is $3, consumers will purchase more than the economically efficient output.
C) If the price of iced tea is $3, the output will be economically efficient but there will be a deadweight loss.
D) If the price of iced tea is $3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.