Game theory is a method of analyzing the strategic interaction that occurs between small numbers of
A) people.
B) firms.
C) countries.
D) All of the above are correct.
D
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Use consumer indifference curves and budget lines to show the optimal consumption curves for a normal good and for an inferior good. (Use two graphs.) Be sure your graphs are completely and correctly labeled.
What will be an ideal response?
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then normative analysis would conclude that:
A. the policy was effective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
B. the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
C. the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D. there is no "right" conclusion to be reached (in a normative sense), since people have different opinions concerning what constitutes a better outcome.
Monopolistic competition is different from perfect competition because monopolistic competitors produce
a. a homogeneous product b. a homogeneous but unique product c. identical products d. differentiated products e. products similar to those produced by a monopoly
Which of the following statements about mutual funds is correct?
a. A mutual fund is a financial intermediary. b. A mutual fund acquires its funds primarily by selling shares to the public. c. People who buy shares from a mutual fund accept all of the risk and return associated with the mutual fund's portfolio. d. All of the above are correct.