In a two-player simultaneous game, if player A has a dominant strategy and player B does not, player B will
A) employ a mixed strategy.
B) choose his best strategy assuming that player A plays her dominant strategy.
C) not achieve a Nash equilibrium.
D) assume that player A does not choose her dominant strategy.
B
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If a change in the tax laws leads to a $100 billion decrease in tax revenue, then aggregate demand
A) increases by $100 billion. B) increases by less than $100 billion. C) increases by more than $100 billion. D) decreases by $100 billion. E) decreases by more than $100 billion.
The amount of a tax paid by the sellers will be smaller the more ________ the demand and the more ________ the supply
A) elastic; inelastic B) inelastic; elastic C) inelastic; inelastic D) elastic; elastic
If only two people are trading their endowments and no production is possible, then the equilibrium they reach will
A) be on their contract curve. B) result in unequal marginal rates of substitution for the two people. C) result in one person being worse off than with his or her endowment. D) All of the above.
The price elasticity of demand is the
a. percentage change in price divided by the percentage change in quantity demanded b. average change in price divided by the average change in quantity demanded c. percentage change in quantity demanded divided by the percentage change in price d. average change in price divided by the average change in quantity demanded e. percentage change in quantity demanded divided by the average change in price