Consider the Prisoners' Dilemma game, and suppose one player confesses but the other player does not confess. This outcome is
a. a Nash equilibrium.
b. Pareto optimal.
c. a Pareto improvement over the outcome where both players confess.
d. Pareto-inferior to the outcome where neither player confesses.
b. Pareto optimal.
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The demand curve for an inferior good can never be downward sloping
Indicate whether the statement is true or false
If expectations are rational, the difference between the actual rate of inflation and the expected rate of inflation will be zero
a. True b. False Indicate whether the statement is true or false
What combination of changes would most likely decrease the equilibrium price?
A. supply increases and demand decreases B. demand increases and supply increases C. supply decreases and demand increases D. demand decreases and supply decreases
Claudia spends her income on two goods, Blu-ray rentals and chewing gum. She considers both goods to be normal goods. If Claudia's income stays constant and the relative price of Blu-ray rentals increases, she will:
A. rent more Blu-rays and purchase less chewing gum. B. rent more Blu-rays and purchase more chewing gum. C. rent fewer Blu-rays and purchase more chewing gum. D. rent fewer Blu-rays and purchase less chewing gum.