Why can't two firms in a Prisoners' Dilemma enforce a better outcome that has higher payoffs?
A) Under an outcome with higher payoffs, the outcome is not a Nash equilibrium and each firm has an incentive to change their actions.
B) Barriers to entry
C) Barriers to exit
D) The Nash equilibrium in a Prisoners' Dilemma has the highest possible payoffs for both firms.
A
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Investment in human capital
A) is quite different from and has a much lower return than investment in physical capital. B) is just like investment in physical capital and has a return similar to that earned from other investments. C) is just like investment in physical capital but has a much greater return than do other investments. D) is not comparable to other investments in any way since human capital is embodied in the person.
The Baker Plan for addressing the debt crisis was based on the assumption that
A) most countries would eventually default on their debt. B) forgiveness of some of the debt was inevitable. C) hyperinflation would eventually reduce the real value of the debt. D) renewed lending by U.S. and European banks would restore growth and make the debt manageable.