Figure 12.8 depicts an advertising game between two stores. Which of the following possible outcomes is a Nash equilibrium of the game?
A. Neither store advertises.
B. Only Store A advertises.
C. Only Store B advertises.
D. Both Store A and Store B advertise.
Answer: D
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Positive externalities and high transaction costs make voluntary social cooperation difficult because they
A) are also obstacles to the effective working of democratically controlled governments. B) can be eliminated by government. C) can best be reduced by abandoning persuasion and voluntary cooperation. D) make government intervention necessary. E) make it easier for cartels to operate effectively.
Assume Mimi's budget constraint is shown in the graph shown. If earrings cost $7, then hairbands must cost:
A. $3.50.
B. $7.
C. $5.25.
D. $4.
Contrast the economic experience of the HPAE with the experience in Latin America, especially with regard to the 1980s and in terms of weathering financial crises
What will be an ideal response?
The present value of $500,000 in 4 years at 7 percent interest is approximately:
A. $381,448. B. $655,398. C. $344,682. D. None of these statements is true.