Refer to the scenario above. This is an example of a(n) ________
A) extensive-form game
B) simultaneous-move game
C) zero-sum game
D) mixed strategy game
B
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Acquiring a supplier because it becomes more profitable
a. will raise the asking price to offset any increase in cash flow over time b. will increase your profits c. will decrease your profits d. will make you alter operations
If a teachers' union negotiates the wage for all college professors, the market supply curve of college professors
a. is perfectly elastic everywhere b. is perfectly inelastic everywhere c. is horizontal and then it slopes upward d. is vertical and it slopes upward e. slopes upward and then becomes horizontal
The application of game theory to economics allows us to understand firm behavior in some forms of oligopoly. Game theory suggests that in a two-firm industry, each firm will
a. avoid pricing high when the other prices low b. select high prices and defend that selection because, in the long run, their profits are higher than if they competed by lowering prices c. end up mistaking the other's intentions, which results in low prices and low profit for both in the long run d. end up colluding with the other to form a cartel e. agree with the other not to allow other firms to enter the industry
Comparative advantage is the ability to produce a good at a lower opportunity cost than others
Indicate whether the statement is true or false