The above figure shows the payoff matrix for two firms, A and B, selecting an advertising budget. The firms must choose between a high advertising budget and a low advertising budget. A Nash equilibrium is that
A) firm A selects a high advertising budget and firm B selects a low advertising budget.
B) firm A selects a low advertising budget and firm B selects a high advertising budget.
C) both firms select a high advertising budget.
D) both firms select a low advertising budget.
C
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If average labor productivity increases, then the same number of employed workers will always produce:
A. more output per person. B. less output per person. C. less total output. D. more total output.
Consider the labor market for short-order cooks. An increase in the wages paid to fast-food workers will cause
a. both equilibrium wages and equilibrium employment to increase in the market for short-order cooks. b. both equilibrium wages and equilibrium employment to decrease in the market for short-order cooks. c. equilibrium wages to increase and equilibrium employment to decrease in the market for short-order cooks. d. equilibrium wages to decrease and equilibrium employment to increase in the market for short-order cooks.
Which of the following correctly describes the system of fractional reserve banking?
a. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio. b. Banks can loan out the entire deposits but a small fraction of their own profits must be kept as reserve in bank vaults. c. Banks reserves amount to only a fraction of funds on deposit with the bank. d. The federal government insures only a fraction of the deposits at most banks.
As the price of washing machines fell, tens of millions of housewives substituted _______ for _______.
Fill in the blank(s) with the appropriate word(s).