George and Jerry are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $3,000 . If they both advertise on radio, each will earn a profit of $5,000 . If neither advertises at all, each will earn a profit of $10,000 . If one advertises on TV and the other advertises on radio,
then the one advertising on TV will earn $4,000 and the other will earn $2,000 . If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $8,000 and the other will earn $5,000 . If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $9,000 and the other will earn $6,000 . If both follow their dominant strategy, then George will
a. advertise on TV and earn $3,000.
b. advertise on radio and earn $5,000.
c. advertise on TV and earn $8,000.
d. not advertise and earn $10,000.
d
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According to the U.S. Department of Justice Merger Guidelines, a Herfindahl-Hirschman index (HHI) above ________ is associated with a highly concentrated industry. Therefore, if the automobile industry had an HHI of 2,200, then a vertical merger between GM and one of its suppliers likely would be:
A. 2,400 and approved since the HHI is below the acceptable threshold B. 1,800 and rejected since the HHI is above the acceptable threshold C. 1,300 and rejected since the HHI is above the acceptable threshold D. None of the answers are correct
When a credit card company offers different services with its card, like travel insurance for air travel tickets purchased with the credit card or product insurance for items purchased with the card, the credit card company is trying to
A) shift the demand curve for competing firms to the right. B) create a perfectly competitive market in which to sell its credit card. C) create a barrier to entry for competing firms. D) convince customers that its card has greater value than those offered by rival firms.
When firms are able to increase the amount of physical capital available to workers, the
a. marginal product of labor will decrease. b. value of the marginal product of labor will decrease. c. value of the marginal product of labor will increase. d. final product price will increase.
The main debate during the 1960s was
A) between Keynesians and classicals. B) between new Keynesians and new classicals. C) between Keynesians and monetarists. D) between new Keynesians and monetarists.