When government action leads to inefficiency, it is known as
A) government failure.
B) government as usual.
C) lack of government trust.
D) politics.
A
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Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q241g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />This game is ________ because ________.
A. not a prisoner's dilemma; OPEC does not have a dominant strategy
B. not a prisoner's dilemma; cheating is better for both
C. a prisoner's dilemma; cheating is better for both
D. a prisoner's dilemma; not cheating is better for both
Which is of the following statements is correct?
A. If demand decreases, then price will decrease. B. If price decreases, then demand will decrease. C. If demand increases, then price will decrease. D. If price increases, then demand will decrease.
An assumption behind the infant industry argument for tariff protection is that
A) foreign competitors are selling output below average cost. B) the domestic industry will be facing an upward adjustment in its average cost. C) the domestic industry will eventually gain comparative advantage in producing the good. D) the market needs additional competition to satisfy consumer demand.
Under a fixed exchange rate system, a government is at risk of running out of foreign currency reserves when the country's imports exceed its exports
a. True b. False Indicate whether the statement is true or false