When the ownership of the different stages of production of a commodity lies with different individuals, it becomes difficult to take decisions on capacity expansion because of all the following reasons, EXCEPT:
a. differences in attitudes toward risk.
b. differences in motivation.
c. different degrees of risk exposure.
d. different abilities to hedge themselves.
QUESTION 2Often, when no player has a dominant strategy
A) there is a dominated strategy.
B) there is a chance for circular reasoning.
C) then another player is needed.
D) then there is a competitive market.
QUESTION 3When wages increase, the income effect
a. increases the quantity of labor supplied
b. increases the supply of labor.
c. decreases the quantity of labor supplied
d. decreases the supply of labor.
QUESTION 4A firm that controls both the upstream as well as the downstream stages of production is said to be:
a. functionally integrated.
b. perpendicularly integrated.
c. vertically integrated.
d. horizontally integrated.
QUESTION 5If a player has a strategy where one course of action under-performs all others no matter what other players do, that strategy is
A) a prisoner's dilemma.
B) dominated.
C) dominant.
D) a loser.
QUESTION 6When wages decrease
a. the substitution effect increases the quantity of labor supplied.
b. the substitution effect increases the supply of labor.
c. the income effect increases the quantity of labor supplied.
d. the income effect increases the supply of labor.
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