Changes in relative prices create substitution effects
a. True
b. False
Indicate whether the statement is true or false
True
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Two games that differ only in the timing of moves—one simultaneous, the other sequential move—can sometimes have completely different subgame-perfect equilibria. Why?
a. The second mover to choose non-credible threats. b. The first mover can choose an action that it would deviate from if its action were secret. c. Subgame-perfect equilibrium cannot be applied to simultaneous games. d. All of the above.
Transfer payments are part of personal income but not national income because
A. National income is a receipts concept. B. They are a payment for which no goods or services are exchanged. C. They represent a payment to factors of production. D. Personal income is an earnings concept.