Suppose Ford, GM, and Chrysler produce all the pick-up trucks in the United States. If they all are priced at $30,000 and Ford introduces a $5,000 rebate, what can Ford expect to see?
a. GM and Chrysler go out of business
b. an immediate rebate or price-cut response by GM and Chrysler
c. a long-run shift of industry profit from GM and Chrysler to Ford
d. an unprecedented increase in Ford truck sales in the long-run
e. an increase in GM and Chrysler production to compensate for loss of profit
B
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Game theory provides tools that are used to model:
A. the cost functions faced by firms. B. consumer demand. C. strategic interdependencies. D. the behavior of perfectly competitive firms.
Suppose you purchase a call option with a strike price of $85 for an options price of $10 How much profit will you earn if you exercise it when the price is $100?
What will be an ideal response?
Suppose Country X is one of the largest exporters of coffee in the world. A recent massive cyclone has destroyed much of the coffee crop in Country X and has considerably lowered its exports. Which of the following is a likely consequence of this disaster?
A. The price of coffee in the international market will decline. B. The size of Country X's trade triangle will increase. C. The price of Country X's imports relative to the price of its exports will increase unambiguously. D. Country X's terms of trade will improve.
A cross-country analysis of health statistics suggests that countries with single payer systems have infant mortality rates that are ________ than those rates for the U.S. and survival rates for breast and prostate cancer that are ________ than those rates for the U.S.
A. lower; lower B. higher; higher C. higher; lower D. lower; higher