In oligopoly pricing, firms are caught in a situation called prisoner's dilemma when they
A. compete aggressively and earn low profits.
B. compete aggressively and earn high profits.
C. cooperate to minimize prices.
D. cooperate to maximize profits.
Answer: A
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In the figure above, a factor that could cause the supply of bonds to shift to the right is
A) a decrease in government budget deficits. B) a decrease in expected inflation. C) a recession. D) a business cycle expansion.
Jacqueline has a Ph.D. in economics. She has turned down many job offers because she eventually hopes to teach at one of the top ten universities in her field. The type of unemployment she is experiencing is: a. frictional unemployment. b. structural unemployment. c. seasonal unemployment. d. cyclical unemployment
e. underemployment.
What does the Herfindahl-Hirschman Index value near zero imply about the market?
a. Monopoly b. Perfect competition c. Monopolistic competition d. Oligopoly
If a firm decides to ignore the reactions of its rivals to its policies, the appropriate model to analyze its behavior is
a. game theory. b. perfect competition. c. monopoly. d. cartels.