Suppose two firms are trying to decide how much to budget for research and development. Once a new discovery is made, each firm benefits regardless of which firm developed the innovation. In this R&D game of chicken, the Nash equilibrium will be that
A) either both firms conduct the R&D or neither firm conducts the R&D.
B) only one firm conducts the R&D but which firm conducts the R&D cannot be determined.
C) both firms conduct the R&D.
D) neither firm conducts the R&D.
B
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Job rationing occurs when the real wage rate is
A) above the equilibrium wage rate so there is a shortage of labor. B) above the equilibrium wage rate so there is an excess supply of labor. C) equal to the equilibrium wage rate so there is no excess supply of labor. D) below the equilibrium wage rate so there is an excess supply of labor. E) Both answers A and D are correct because whenever the real wage rate is above or below the equilibrium wage rate, there is an excess supply of labor.
Referring to Figure 19.2, the effect of a decrease in Japanese interest rates is represented by a movement from point
A) a to d. B) b to c. C) b to a. D) a to b.
Economists look at which of the following to get a quick visual expression of income distribution?
a. Gini coefficient. b. IRS records of how much income each household earned. c. supply and demand curves for resources. d. Lorenz curve. e. surveys of business estimates for MRPs.
Which of the following is a true statement?
A. Direct foreign investment to DVCs is increasingly provided by commercial banks. B. Direct foreign investment to DVCs has dwindled to near zero in recent years. C. Approximately 5 percent of the GDP of IACs goes to foreign aid. D. Foreign aid from the IACs to the DVCs has greatly expanded in the past several years.