Refer to Figure 9.1. GMB and VolgaBus compete to sell 100 buses to MetroTravel, a city-owned bus company. If sealed bids are required and no illegal activities occur, what will be the outcome? Explain the process.
What will be an ideal response?
The Nash Equilibrium in this game is for both firms to charge low prices. Charging a low price is the best response for each firm to the other firm's best strategy. Neither firm would want to unilaterally change strategies. With low bids, both firms will earn $750,000.
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Under fiscal stabilization policy in the New Keynesian model, after a positive shock to output,
A) the government increases expenditures and the central bank increases the money supply. B) the government increases expenditures and the central bank decreases the money supply. C) the government decreases expenditures and the central bank increases the money supply. D) the government decreases expenditures and the central bank decreases the money supply.
At an equilibrium price: a. quantity demanded exceeds quantity supplied. b. quantity demanded equals quantity supplied
c. quantity demanded is less than quantity supplied. d. there is no scarcity.
Economics is the study of how society allocates its unlimited resources
a. True b. False Indicate whether the statement is true or false
Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, a shift to PPF2 may depict
