In a dynamic game, rational players
A) will reject outcomes that are not subgame perfect.
B) use backward induction to determine best responses.
C) have strategies that select a Nash equilibrium in the game as a whole.
D) All of the above.
D
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Refer to Figure 8-10. Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. The price that sellers receive is
A. P0. B. P2. C. P5. D. P8.
Like negative externalities, tradable permits are useful in allocating common resources because:
A. the depletion of common resources imposes a negative externality. B. the problem present in both is overconsumption. C. the socially optimal quantity is not the same as the individual consumers in either case. D. All of these statements are true.
A Pigovian tax imposed on consumers ________ the price, and if the same tax were imposed on producers, it would ________ the price.
A. decreases; increase B. increases; decrease C. decreases; decrease D. increases; increase
Voss Calculator Company has a monopoly on the sale of graphing calculators. If it sells two of these calculators its total revenue is $500, and if it sells three calculators its total revenue is $700. The marginal revenue of the third calculator sold is
A. $100. B. $150. C. $200. D. $700.