The principal advantage of the game theory approach is that it allows us to
a. take all possible information into consideration before developing a theory
b. better understand why the firm in a competitive industry avoids games
c. better understand how the government should regulate a natural monopoly
d. better understand decision making when one person's choices affect another person's choices
e. understand the relationship between the firm and the industry demand curves
D
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When competitors reach an agreement with one another about the quantities they will produce in order to keep profits high, they have engaged in:
A. price fixing. B. quantity fixing. C. profit fixing. D. tacit collusion.
In the long run, if new fringe firms with same cost structures as existing fringe firms enter the oligopoly market:
a. the dominant firm's ability to extract profit from the market decreases. b. the fringe's ability to extract profit from the market decreases. c. the fringe supply curve rotates leftward and downward. d. the dominant firm's residual demand curve rotates rightward.
The Dutch Disease refers to a situation in which new production of a natural resource results in deindustrialization.
Answer the following statement true (T) or false (F)
In the late 1990s, Thailand, Malaysia, and Indonesia all experienced sharp declines in the value of their currencies; this resulted in economic instability and crisis. The collapse in the values of their currencies undermined their development by:
A. decreasing political instability. B. decreasing population growth. C. increasing corruption. D. reducing investment.