The Nash equilibrium is
a. a pair of strategies, one for each player , in which player A's strategy is the best response while player B's is not
b. a pair of strategies, one for each player , in which player B's strategy is the best response while player A's is not
c. a pair of strategies, one for each player, in which each player's strategy is the best response to the other's
d. a pair of strategies, one for each player, in which neither strategy is a best response
c
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X-inefficiency refers to the situation in which:
A) highly competitive firms have less incentive to minimize their costs of production than other firms because the highly competitive firms have almost no chance to earn above-average profits. B) firms are unable to minimize their costs of production because there is no potential for input substitution. C) firms that use labor-intensive production methods tend to be less efficient than firms that use capital-intensive production methods. D) firms with market power have less incentive to minimize their costs of production than more competitive firms.
Though many assets can be used as a store of value, money is a particularly attractive method to store value because
a. it increases in value as prices rise. b. its purchasing power does not decline when prices rise. c. it is the most liquid of all assets. d. it is backed by gold.
The Coase Theorem works best in places that transaction costs for contracts among people is low. Often in the world of torts and externalities both parties can claim that they have rights to impose on others. One case is that of a railroad that is noisy and scares the cattle and the rancher whose cattle sometimes wander in front of moving trains causing damage to them and the train. What does the
Coase say would happen? a. The train should have property right to be safe from wandering cattle, and the rancher should be liable for train damage of rampaging cattle. b. The rancher should have the property right to be safe from noisy trains, and the railroad should be liable for weight loss of cattle from train whistles and rumbling noise. c. If transaction costs are low, the efficient activity will occur, either the rancher or railroad installing fences to protect from rampaging cattle and/or sound insulation with trees, or if it is cheaper, fewer train trips per day. The cheapest or most efficient solution will happen, regardless of who is assigned the original property right.
According to Keynesians, an increase in the money supply will have its greatest impact on GDP when the aggregate demand curve intersects:
A. the vertical portion of the aggregate supply curve. B. the upward sloping portion of the aggregate supply curve. C. the horizontal portion of the aggregate supply curve. D. either the upward sloping or the vertical portions of the aggregate supply curve.