Which of the following statements about Nash equilibrium is true?
a. Every finite game has more than one Nash equilibrium.
b. A pair of dominant strategies in a price-fixing game is always a Nash equilibrium.
c. A dominance solvable game does not have a Nash equilibrium.
d. Games with an infinite number of strategies have multiple Nash equilibria.
B
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What is likely to happen in a used-car market if the buyers feel that the best they can do is to buy a lemon?
A) The sellers of gems reap high profits. B) Higher gains from trade are realized. C) The entire market shuts down. D) The sellers of lemons earn high profits.
When people shop more frequently and transfer money out of their bank account more often in an effort to help avoid the loss in purchasing power of cash, they bear the _____ costs of inflation
a. menu b. shoe-leather c. unit-of-account d. direct
Proponents of the notion of a "political business cycle" suggest that:
A. a possible cause of economic fluctuations is due to the use of fiscal policy for political purposes. B. cyclical swings in the economy are produced by the inherent instability found in capitalist economies. C. the cyclically adjusted budget is a better indicator of the state of the economy than the actual budget. D. there is a trade-off among goals that tends to make the economic policies of state and local governments procyclical.
In which of the following situations will market clearing price decrease and the equilibrium quantity increase?
A) an increase in demand with no change in supply B) an increase in supply with no change in demand C) a decrease in supply with no change in demand D) a decrease in demand with no change in supply