The prisoner's dilemma game can be used to describe
A. how individuals acting in their self-interest leads to the best outcome overall.
B. why candidates in elections go negative.
C. a zero sum game.
D. the game Rock Paper Scissors
Answer: B
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Which of the following statements correctly identifies the difference between the cross-price elasticity of demand and the income elasticity of demand?
A) The income elasticity of demand can take only positive values, whereas the cross-price elasticity of demand can take both positive and negative values. B) The cross-price elasticity of demand can take only negative values, whereas the income-elasticity of demand can take both positive and negative values. C) The income elasticity of demand for a good is independent of the price changes of related goods, whereas the cross-price elasticity of demand for a good is independent of the income changes of the consumer. D) The income elasticity of demand for a good is zero for normal goods, whereas the cross-price elasticity of demand for a good is always positive for normal goods.
In which of the following market structures can a firm earn an economic profit in the short run?
a. Perfect competition b. Monopolistic competition c. Monopoly d. All of these market structures can earn an economic profit in the short run
Adverse selection is
a. the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior. b. an action taken by an uninformed party to induce an informed party to reveal information. c. the failure of majority voting to produce transitive preferences for society. d. the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party.
The purchasing power parity theory usually does not explain exchange rates at a particular point in time because of trade barriers, central bank intervention in exchange markets, and the fact that many products are not traded or are not comparable across countries
Indicate whether the statement is true or false