In the game in Scenario 13.6, what is the Nash equilibrium?
A) The strategy pair associated with -$100, -$1.
B) The strategy pair associated with $2, -$0.5.
C) The strategy pair associated with $1, -$1.
D) The strategy pair associated with -$0.5, -$0.5.
E) There is no Nash equilibrium in pure strategies.
B
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You using a Laspeyres (fixed-weight )price index to compare price changes over time, and the index is based on consumption bundles from 2005 when energy costs were lower and housing costs were higher. Your results are likely to:
A) Overstate changes in the cost of living because the weight assigned to energy is too small. B) Overstate changes in the cost of living because the weight assigned to energy is too large. C) Understate changes in the cost of living because the weight assigned to housing is too small. D) Understate changes in the cost of living because the weigh assigned to housing is too large.
Why do negative supply shocks present such a difficulty for the Federal Reserve?
a. the Fed can choose to fight the rising price level, but this will result in lower unemployment. b. the Fed can choose to fight the rising unemployment, but this will result in an even lower price level. c. the Fed can choose to fight the falling unemployment, but this will result in an even higher price level. d. the Fed can choose to fight the rising unemployment, but this will result in an even higher price level. e. the Fed can choose to fight the rising unemployment, but this will result in higher taxes.
The fallacy of composition is the incorrect view that
a. everything else is always held constant when a change occurs. b. a small change in an economic variable will have unrecognizable but significant consequences on the economy. c. when two events are associated, the one observed first must have caused the second. d. if something is true for an individual, then it must also be true for the group.
Google and Yahoo internet search engines are examples of:
A. government-implemented models. B. coordinating mechanism designs. C. free market pricing models. D. auction markets.