Consider the following payoff matrix facing Harry and Sally when each chooses to go to the coffee shop listed. Both Harry and Sally would like to meet each other but are shy about asking the other out on a date. Harry StarbucksDunkin DonutsSally StarbucksH: 1, S: 1H: 0, S: 0 Dunkin DonutsH: 0, S: 0H: 1, S: 1If Harry and Sally go to the coffee shop every day, what is Harry's best strategy?
A. Stay at home.
B. Randomly choose between the two shops and hope Sally will end up there too.
C. Harry has no best strategy.
D. Choose one shop to go to and keep going to it.
Answer: D
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Suppose the United States is experiencing a balance of payments surplus. To prevent the exchange rate from appreciating, the U.S. Treasury must
A) sell dollars and buy foreign currency. B) sell both dollars and foreign currency. C) buy both dollars and foreign currency. D) sell foreign currency and buy dollars.
Socialism seeks to abolish the market-price system. In the economic way of thinking, socialism would therefore
A) generate tremendous economic growth. B) overcome scarcity. C) lead to a greater coordination among peoples' production and consumption plans. D) allow everybody the opportunity to seek their comparative advantage. E) accomplish none of the above.
Generating electricity creates air pollution. This industry, if left unregulated, will produce
A) more than the efficient level of output. B) the efficient level of output. C) less than the efficient level of output. D) sometimes more and sometimes less than the efficient level of output.
During which period did the United States experience a trade balance greater than -$700 billion on goods and services?
a. 1970–1979
b. 1980–1989
c. 1990–1999
d. 2000–2009