Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. Suppose Country B decides to specialize in tomatoes, and Country A specializes in bananas. What terms of trade would both countries agree to? One tomato for:
A. one banana
B. two bananas
C. four bananas
D. six bananas
C. four bananas
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Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q382g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />Which of the following statements is correct?
A. Mexico's dominant strategy is to abide by the agreement.
B. Mexico does not have dominant strategy.
C. Mexico's dominant strategy is to cheat on the agreement.
D. Mexico does not have a dominated strategy.
Which of the following is NOT a fiscal policy?
A. Lowering personal tax rates to influence labor supply B. Increasing the money supply to expand aggregate demand C. Offering subsidies to export firms D. Increasing tariffs to reduce imports
Which of the following is a characteristic of oligopoly?
A. marginal cost pricing B. only a few firms in the industry C. zero economic profits in the short run D. mutual firm independence
Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. If demand for wheat is D3, then in the long run
A. the firm will exit the industry. B. the firm will shut down. C. new firms will enter the industry, and the current firms will expand production. D. None of the above is correct.