In a game, which strategic choice is called a dominant strategy? ...

In a game, which strategic choice is called a dominant strategy?

QUESTION 2

Monopolistic competitors and perfect competitors are alike in:
 a. facing horizontal demand curves.
 b. earning zero economic profit in the short run.
 c. earning zero economic profit in the long run.
 d. relying on advertising to attract buyers to their products.

QUESTION 3

Suppose a U.S. investor buys a Canadian government bond with a face value of Canadian dollar (CAD) 100 and an annual yield of 8.8 percent. Which of the following statements is true?
 a. At maturity, the dollar return from the Canadian bond will be 108.8, regardless of what happens to the exchange rate.
  b. The Canadian bond will yield the same dollar return from the time of purchase to the time of maturity.
  c. An American will make a profit on the Canadian bond only when the CAD-denominated return is higher on the Canadian bond than the dollar-denominated return on a comparable U.S. bond.
  d. The dollar return on the Canadian bond depends on the dollar price of the Canadian dollar at the time of maturity.
  e. The decision to buy the Canadian bond should be based solely on the CAD interest return and not on changes in the exchange rate.

QUESTION 4

Why do competitive firms enter the market in spite of the price war threatened by the dominant firm?

QUESTION 5

A monopolistically competitive firm derives its ability to influence price from:
 a. the perfectly elastic demand curve it faces.
 b. barriers to entry.
 c. its product, which is differentiated in some way from competing products.
  d. its position as the sole supplier in the market.

QUESTION 6

Suppose purchasing power parity exists in the car stereo market in the United States and Australia. If a car stereo costs 230 in the United States and the exchange rate is 1 = AUD1.67, the same car stereo may be purchased in Australia for approximately:
 a. AUD 138.
  b. AUD 230.
  c. AUD 2,300.
  d. AUD 384.
  e. AUD 108.