Behaving strategically means:
A. evaluating decisions in which players act in their own self-interest, but the interplay of those decisions does not exist.
B. acting to achieve a goal by anticipating the interplay between your own and others' decisions.
C. acting to achieve a goal by withholding key information from the person with whom an exchange is being made.
D. evaluating the impact of your choices on an uninvolved third party.
Answer: B
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Answer the following statements true (T) or false (F)
1) All else equal, a cartel sets the price higher and produces less than in a competitive market. 2) Each firm in a cartel has an incentive to cheat on the agreement and produce less than the bargained amount. 3) Firms in a cartel produce a quantity at which marginal revenue exceeds marginal cost. 4) If new firms enter a cartel market, the cartel can either incorporate the new firms into the agreement or exclude them, but regardless of inclusion or exclusion, the probability that the cartel will survive decreases. 5) In order to sustain a cartel, members are required to sign binding contracts.
Last year a country had exports of $50 billion, imports of $60 billion, and domestic investment of $40 billion. What was its saving last year?
a. $30 billion b. $20 billion c. $10 billion d. -$10 billion
When the euro ______ in value compared to the U.S. dollar this means that the U.S. dollar ______ in value compared to the euro.
a. increases; increases b. depreciates; appreciates c. appreciates; increases d. depreciates; depreciates
Figure 9.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. Initially buyers believe that 50% of used digital cameras in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer digital cameras are sold in equilibrium?
A. 90 B. 110 C. 140 D. The number of cameras sold in equilibrium is the same as the outcome with neutral expectations.