In Figure 3-4, for which of the following would this statement be true: “To get more apples we have to give up wheat.” A movement from
A. A to E.
B. C to D.
C. D to C.
D. D to E.
E. B to C.
Answer: B
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A game's outcome is a Nash equilibrium when
a. any attempt to improve one player's payoff will lower the other player's payoff. b. neither player wants to change his strategy, given the strategy chosen by the other player. c. the total payoff to the players is as large as possible. d. the first player has selected his strategy taking the second player's optimal response into account.
If the marginal revenue of a producer exceeds his marginal cost:
A) profit is maximized. B) profit is minimized. C) additional production enhances profits. D) additional production reduces profits.
The equation total production = total income = total expenditure is called
A) the goods—market equilibrium condition. B) the total identity. C) the fundamental identity of national income accounting. D) Say's Law.
The Stackelberg model is more appropriate than the Cournot model in situations where
A) there are more than two firms. B) all firms enter the market simultaneously. C) one firm makes its output decision before the other. D) firms will be likely to collude.