Refer to the information provided in Table 14.6 below to answer the question that follows.
Table 14.6B's Strategy
?AdvertiseDon't Advertise??A's profit $150 millionA's profit $400 million?AdvertiseB's profit $150 millionB's profit $100 millionA's Strategy????Don'tA's profit $100 millionA's profit $200 million?AdvertiseB's profit $400 millionB's profit $200 millionRefer to Table 14.6. The result of this game is a prisoners' dilemma. In which of the following cases is it most likely that the firms will be able to overcome the prisoners' dilemma?
A. repeated play
B. a single interaction
C. government intervention
D. when both firms follow a maximin strategy
Answer: A
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From an economic standpoint, the amount of pollution should be
A) zero. B) the amount that allows firms to maximize profits. C) the amount where firms are earning a normal rate of return on investment. D) at the point at which the marginal benefit from further reduction equals the marginal cost of further reduction.
Neoclassical economics does not hold which of the following assumptions?
A. People are fundamentally rational B. People can make errors initially, but they learn quickly C. People's errors are random and rare D. People make regularly-repeated mistakes
The marginal propensity to save is
A) real consumption/real disposable income. B) change in real saving/change in real disposable income. C) change in real consumption/change in real disposable income. D) real saving/real disposable income.
Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices account for ________ of health care costs in the United States
A) almost 40 percent B) approximately 25 percent C) between 15 and 20 percent D) between 1 and 4 percent