Economists use game theory to analyze oligopolies because
A) it is more enjoyable for economists and students to learn by playing games.
B) game theory is useful in understanding the actions of firms that are price takers.
C) game theory helps us to understand why interactions among firms are crucial in determining profitable business strategies.
D) real markets are too complicated to analyze without using games.
C
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The law of demand applies to
A) clean streets. B) clean air. C) clean water. D) the maintenance endangered species. E) all of the above.
If there is an advancement in the technology used to produce a product, what is the likely effect it may have on the supply?
A. The company would not change its manufacturing. B. More people would be needed to produce the product. C. It would decrease the supply. D. It would increase the supply.
Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle
A) increase; decrease B) decrease; increase C) decrease; decrease further D) increase; increase further
By Marks buys a one-year German government bond (called a bund) for $400. He receives principal and interest totaling $436 one year later. During the year the CPI rose from 150 to 162. The nominal interest rate on the bond was ________, and the real interest rate was ________.
A. 9%; 1% B. 36%; 24% C. 9%; -1% D. 36%; 12%