Consumers can spend their entire disposable income.
Answer the following statement true (T) or false (F)
True
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Suppose the government decides that a particular commodity is a luxury and decides to fix its price above the market-determined price. What implications could this policy have?
What will be an ideal response?
The figure above shows the situation facing Smart Digit, Inc, a firm in monopolistic competition that produces calculators. What quantity does the firm produce?
A) 200 calculators per day B) 300 calculators per day C) more than 300 calculators per day and less than 400 calculators per day D) 400 calculators per day
Which of the following is not an argument used in favor of protectionism?
a. To preserve national security. b. To reduce prices paid by domestic consumers. c. To protect against "unfair" competition because of cheap foreign labor. d. To protect an "infant" industry. e. To protect domestic jobs.
Backward induction is a useful tool for:
A. finding an optimal strategy in a sequential game. B. finding an optimal strategy in a simultaneous game. C. analyzing the decisions in a prisoner's dilemma-type game. D. Backward induction is useful in any of these games.