Answer the following statement(s) true (T) or false (F)
1. The Prisoners' Dilemma game is another situation where the Invisible Hand Theorem is true.
2. The Axelrod study shows that "Tit-for-Tat" is a successful strategy for playing a repeated Prisoners' Dilemma game.
3. The Peltzman study shows consumers overall have benefited from the requirement that drug manufacturers prove the safety and effectiveness of their products.
4. Consumers will be better off when the government imposes minimum quality standards.
5. The Stigler and Friedland study shows that regulation always has significant effects on price, although those effects may be positive or negative.
1. False
2. True
3. False
4. False
5. False
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Why is a small country more likely to gain from international trade than a large country?
a. Because autarkic relative prices in a small country are likely to be quite different from the world relative prices. b. Because a small country, unlike a large country, does not have the resources it needs to be self-sufficient. c. Because small countries tend to be specialized in their production, while large countries tend to be diversified. d. Because a small country is less likely to encounter decreasing returns to scale than is a large country.
A manager believes there is a 10 percent chance their firm will have to pay $500,000, a 20 percent chance that they will have to pay $400,000 and a 70 percent chance they will be found innocent and pay nothing except the legal fees of $100,000. The manager has been offered a settlement deal of $230,000, which the manager's firm would have to pay the plaintiff. If the manager flips a coin to
decide to enter litigation or to settle, the manager is ________. A) a risk lover B) risk intolerant C) risk neutral D) risk averse
What is the most important characteristic of monopolistic competition? How do firms behave differently from perfect competitors?
What will be an ideal response?
In order to assure allocative efficiency:
a. people's marginal rate of substitution must equal the economy's rate of product transformation. b. people's marginal rate of substitution must equal the firm's rate of technical substitution among inputs. c. a firm's rate of technical substitution must equal the economy's rate of product transformation. d. all of the above.