The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement.
In the Nash equilibrium of this game:
A. Bagel World abides and Bagels'R'Us cheats
B. both firms abide by the agreement
C. both firms cheat on the agreement
D. Bagel World cheats and Bagels 'R' Us abides
Answer: C
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A perfectly competitive firm produces so that its marginal cost equals the price
Indicate whether the statement is true or false
The Phillips curve reflects
a. the short-run tradeoff between inflation and unemployment b. short- and long-run tradeoffs between unemployment and inflation c. the long-run tradeoff between inflation and unemployment d. the income distribution effects of inflation e. short-run fluctuations in GDP
If a worker receives a fixed payment of $100 plus $10 for every hour she works, what is the maximum total earnings the worker can receive if she is restricted to a maximum of 12 hours of work per day?
A. $125 B. $220 C. $120 D. $340