In the game depicted below, firms 1 and 2 must independently decide whether to charge high or low prices.Firm 1Firm 2??High PriceLow Price?High Price(10,10)(5,-5)?Low Price(-5,5)(0,0)A dominant strategy for firm 1 is:
A. high price.
B. different from firm 1's secure strategy.
C. low price.
D. low price and different from firm 1's secure strategy.
Answer: A
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Private disposable income equals
A) GNP - taxes + transfers + interest. B) NNP - taxes + transfers + interest. C) national income - taxes + transfers + interest. D) national income - taxes - transfers + interest.
For a given positively sloped supply curve, the price increase to consumers resulting from a specific tax imposed on sellers will be
A) greater the more price elastic demand is. B) greater the less price elastic demand is. C) equal to the entire tax when demand is perfectly elastic. D) equal to half of the tax whenever demand is unit elastic.
If the fiscal policy makers aim to increase aggregate demand, they will likely enact:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. expansionary monetary policy. D. contractionary monetary policy.
Economies of scale are also referred to as increasing returns to scale.
Answer the following statement true (T) or false (F)