Bayesian updating in a separating equilibrium implies the initially uninformed player will fully know what type he is playing when he has to make his move.
Answer the following statement true (T) or false (F)
True
Rationale: In a separating equilibrium, each sender type sends a different signal, thereby conveying full information about his type.
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Use the following graph to answer the next question.
Assume that Japan and the United States are engaged in a system of flexible exchange rates. An increase in the supply of yen will result in a(n) ________.
A. increase in the dollar price of yen B. appreciation of the U.S. dollar C. depreciation of the U.S. dollar D. appreciation of the yen
Suppose two countries, A and B, are at war with each other. Country A is very wealthy; country B is very poor. The XYZ Co produces tanks
Is XYZ able to set a different price for the tank sold to country A than the price for the tank sold to country B? Explain.
Asymmetric information in financial markets exists when: a. borrowers reveal their financial details to banks before borrowing funds
b. borrowers know more about their ability to repay loans than lenders do. c. lenders know more about borrowers than borrowers know about themselves. d. borrowers pay off a loan before it is due. e. borrowers and lenders have equal information about borrower creditworthiness.
Which of the following does NOT cause a shift in demand?
A. change in tastes B. change in the price of a related good C. change in the price of the good D. change in income