When a prisoners' dilemma game is repeated a finite number of times (T)
A) cooperation unravels during the first round of the game, resulting in the static game Nash equilibrium.
B) cooperation continues until the T-2 round, where the players will switch to a non-cooperative Nash equilibrium.
C) firms cooperate and achieve the collusive Nash equilibrium for all rounds.
D) None of the above.
Answer: A) cooperation unravels during the first round of the game, resulting in the static game Nash equilibrium.
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The difference between the maximum price a consumer is willing to pay for a product and the actual price the consumer pays is called
A. utility. B. market failure. C. consumer demand. D. consumer surplus.
The present value of $475 received 3 years in the future would be calculated as which of the following when the interest rate is 6 percent?
A) 475 × 1.6 × 3 B) 475/(1.6)3 C) 475/(1.06)3 D) 3.06/475
One difference between a monopoly and a competitive firm is that
A) a monopoly is a price taker. B) a monopoly maximizes profit by setting marginal revenue equal to marginal cost. C) a monopoly faces a downward sloping demand curve. D) None of the above.
A lower domestic price level tends to:
a. reduce aggregate expenditures and lower the aggregate quantity of goods and services supplied. b. reduce aggregate expenditures and lower aggregate demand. c. reduce aggregate expenditures and raise aggregate demand. d. increase aggregate expenditures and raise the aggregate quantity of goods and services demanded. e. increase aggregate expenditure on foreign goods and lower net exports.