Game theory proves most useful for analyzing
A) perfect competition
B) monopolistic competition
C) oligopoly
D) monopoly
Answer: C) oligopoly
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Referring to a production possibilities curve and the goods being compared, depict the economic event. The economy moves from full employment to a serious recession (capital goods vs. consumer goods).
A. A movement from a point inside the curve to a point on the curve B. A movement from a point on the curve to a point inside the curve C. A shift in the entire curve to the right (outward) D. A shift in the entire curve to the left (inward) E. A movement along the curve
What is a principal-agent problem and why does it create inefficiency? What are efficiency wages and how can they help correct principal-agent problems?
What will be an ideal response?
A rising rate of inflation: a. makes people more willing to hold money as an asset
b. reduces the usefulness of money as a store of value and thus increases the velocity of money. c. increases the usefulness of money as a medium of exchange and thus reduces the velocity of money. d. is usually preceded by a reduction in the money supply. e. does not have any effect on the velocity of money.
A rapid increase in the number of workers, other things the same, is likely in the short term to
a. raise real GDP per person, but decrease real GDP. b. decrease both real GDP and real GDP per person. c. raise both real GDP and real GDP per person. d. raise real GDP, but decrease real GDP per person.