Game theory can be used to investigate
A. why cartels break down.
B. why some firms maintain excess productive capacity.
C. how oligopolists set prices.
D. All of the responses are correct.
Answer: D
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In calculating the unemployment rate, part-time workers over the age of 16 are counted as
A) not in the labor force. B) employed if they are part-time workers for noneconomic reasons and unemployed if they are involuntary part-time workers. C) not in the working-age population. D) unemployed. E) employed.
When the government's outlays exceed its tax revenues, the national debt
A) shrinks thanks to the budget surplus. B) grows to finance the budget deficit. C) grows to finance the budget surplus. D) shrinks thanks to the budget deficit. E) does not change because it has nothing to do with government outlays and tax revenue.
Suppose the market-clearing price of milk is $3.00 per gallon, but the dairy industry persuades the government to establish a legally-mandated price support at $4.00 per gallon. The newly legislated price tends to
A) increase the supply of milk. B) reduce the demand for milk. C) increase the quantity supplied of milk. D) increase the quantity demanded of milk.
The government and a private business are alike in terms of ________ but different in terms of ________.
A. the economic pressure they feel to be efficient; the economic impact of their spending B. the economic pressure they feel to be efficient; the nature of their relationships with their customers C. the nature of their relationships with their customers; the economic pressure they feel to be efficient D. the economic impact of their spending; the economic pressure they feel to be efficient