Of the following situations, explain which are best described as games and which are best described as just decisions:
a. Starbucks is deciding whether to offer a new, 40 oz. option called the Uberventi.
b. Sasha is deciding whether to order a grande latte or venti latte from Starbucks.
c. The people of Catalonia are deciding whether to vote for independence from Spain.
d. MGM Resorts International is preparing to bid to obtain the last available casino license in Macao.
e. The Hollywood Hills Homeowner Association is debating the landscape design for the renovation of the main entrance to their neighborhood.
Situations a, c, and d are best described as games because they involve strategic interaction and mutual interdependence. Situations b and e are best described as just decisions because they do not involve any significant degree of strategic interaction or mutual interdependence.
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The United States can use all of its resources to produce 50 computers or 4,000 shoes. Suppose that at world market prices, one computer exchanges for 100 shoes. Explain how the United States can gain from trade
What will be an ideal response?
Which of the following is a similarity between a first-price sealed-bid auction and a Dutch auction?
A) Bids are placed privately in both the auctions. B) Bids are placed publicly in both the auctions. C) Bidders place their bids simultaneously in both the auctions. D) The winner pays an amount equal to his bid in both the auctions.
Which of the following occurs when an expansionary gap is closed in the long run by the action of firms? a. Output decreases, and the price level increases
b. Inflation decreases, and unemployment rises. c. Both the equilibrium output and the price level increase. d. Both the equilibrium output and the price level decrease. e. Inflation rises, and unemployment decreases
Rising wages can be explained by which of the following?
A. Labor supply is highly sensitive to changes in labor productivity. B. Labor demand increases more rapidly than labor supply. C. Labor demand is stable and predictable. D. Labor supply increases more rapidly than labor demand.