When all players are choosing their best strategies on the assumption that their opponents are doing ...

When all players are choosing their best strategies on the assumption that their opponents are doing likewise, the outcome is called:
 a. a Stackelberg equilibrium.
  b. a Nash equilibrium.
  c. a Cournot equilibrium.
  d. a Bertrand equilibrium.

QUESTION 2

Monopolistic competition is characterized by:
 a. homogeneous products.
 b. barriers to entry.
 c. firms earning economic profits in the long run.
  d. differentiated products.

QUESTION 3

A decrease in the price of a currency in terms of another under a flexible exchange rate regime is called:
 a. capital flight.
  b. depreciation.
  c. revaluation.
  d. devaluation.
  e. currency adjustment.

QUESTION 4

Assume that in a price-fixing game, if Player A breaks the agreement in the first year, she earns 11 while Player B earns 5 . However, if Player A breaks the agreement once, Player B decides to break the agreement for eternity, leaving each to receive 8 per year for the rest of their lives. If they both keep the agreement each receives 9 per year for the rest of their life. If the discount rate is 120 percent per period:
 a. Player A will prefer to break the agreement in the first year.
  b. Player A will prefer to break the agreement in the second year.
  c. Player A will prefer to keep the agreement throughout her life.
  d. Player A will prefer to keep the agreement only for the first five years.

QUESTION 5

Monopolistic competition is characterized by:
 a. one firm selling several products.
 b. many firms selling the same product.
 c. many firms selling slightly different products.
  d. one firm selling one product.

QUESTION 6

When a U.S. importer needs 22,000 to settle an invoice for 25,520 Swiss francs, the exchange rate must be:
 a. 1 Swiss franc = 1.16.
  b. 1 Swiss franc = 0.16.
  c. 1 Swiss franc = 0.84.
  d. 1 = 1.16 Swiss franc.
  e. 1 = 1.84 Swiss franc.

QUESTION 7

Assume that in a price-fixing game, if Player A breaks the agreement in the first year, she earns 11 while Player B earns 5 . However, if Player A breaks the agreement once, Player B decides to break the agreement for eternity, leaving each to receive 8 per year for the rest of their lives. If they both keep the agreement each receives 9 per year for the rest of their lives. If the discount rate is 30 percent per period:
 a. Player A will prefer to break the agreement in the first year.
  b. Player A will prefer to break the agreement in the second year.
  c. Player A will prefer to keep the agreement throughout her life.
  d. Player A will prefer to keep the agreement only for the first five years.