A decision tree is used when modeling:
A. a prisoner's dilemma.
B. simultaneous decisions.
C. games in which timing matters.
D. any type of game.
Answer: C
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Suppose that the economy has witnessed an 8 percent increase in its money supply over the last few years and the Fed now announces a plan to increase the money supply by 4 percent per year. What will be the public response, assuming that the Fed has a reputation for always implementing its announced plans?
a. High-wage contracts will prevail, and the economy will experience lower inflation at the cost of higher unemployment. b. High-wage contracts will prevail, and the economy will experience lower unemployment at the cost of higher inflation. c. Low-wage contracts will emerge, and the economy will experience lower inflation with no change in the unemployment rate. d. Low-wage contracts will emerge and the economy will experience higher unemployment with no change in the inflation rate. e. Low-wage contracts will emerge, and the economy will experience lower inflation at the cost of higher unemployment.
If an excise tax is imposed on steak,
a. the government's tax revenue will decrease b. the government's tax revenue will increase c. the amount of steak produced and sold will increase d. the market price of steak will decrease e. the market price will rise but the market quantity will be unaffected
A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $4,500 . The marginal cost of producing the 101st unit of output is $300 . What is the total cost of producing 101 units?
a. $46.53 b. $800 c. $4,800 d. $5,300
Which of the following is the best example of a microeconomics topic?
A. a price of a new home B. the inflation rate C. the economy's growth rate D. forecasts of a recession next year