Suppose total benefits and total costs are given by B(Y) = 150Y ? 10Y2 and C(Y) = 5Y2. What level of Y will yield the maximum net benefits?
A. 150/20
B. 7
C. 10/9
D. 5
Answer: D
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Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) making a decision to advertise or not. Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm X and firm Y choose not to advertise. B) Both firm X and firm Y choose to advertise. C) Firm X chooses to advertise while firm Y chooses not to advertise. D) Firm X chooses not to advertise while firm Y chooses to advertise.
In a repeated game, cooperation can be enforced by the use of a trigger strategy that
A) leads to a higher payoff of the cheated upon player. B) reduces the payoff of the player that reneged the agreement. C) rewards the player that reneged the agreement. D) is a dominant strategy.
Nominal GDP in a given year is GDP
A) valued in the prices of the base year. B) valued in the prices of that year. C) adjusted for inflation. D) adjusted for the value of intermediate goods.
Over time, technology tends to:
A. set countries apart in terms of productivity. B. allow developing nations to experience the "catch-up" effect. C. diminish in nations that are still developing. D. spread from country to country, equalizing opportunity costs.