Game theory is the:
a. branch of economics that looks at political motives.
b. branch of economics that looks at psychological motives.
c. science of designing effective product differentiation.
d. study of behavior in situations of interdependence.
Ans: d. study of behavior in situations of interdependence.
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Equilibrium market prices for capital and labor are $10 and $8, respectively. Then, the economy experiences one or more supply shocks, so that the marginal product of capital is $12, and the marginal product of labor is $9
Assuming that the available quantities of capital and labor are fixed, which of the following is (are) likely to decrease as the economy approaches its new equilibrium? A) real rental price of capital B) total output C) economic profits D) the quantity of capital in use E) none of the above
An institution that issues a currency at a fixed rate in exchange for an equivalent amount of another designated currency and invests the funds in bonds and liquid assets that provide 100 percent backing for the currency units issued is called
a. a central bank. b. the International Monetary Fund. c. the World Trade Organization. d. a currency board.
Advocates of antipoverty programs believe that fighting poverty
a. can make everyone better off. b. is most successfully accomplished by charities. c. is most efficiently accomplished by the market. d. reduces the well-being of tax payers.
Which of the following is the primary reason for the current and impending shortfalls in Social Security funding?
A. Massive increases in Social Security retirement benefits. B. Reductions in payroll taxes used to fund Social Security. C. Baby boomers moving into retirement age in large numbers. D. High unemployment rates among Millennial workers.