Consider the accompanying payoff matrix.
When Row Resorts and Column Cruises both play their dominant strategy:
A. Column Cruises earns a higher profit than does Row Resorts.
B. Row Resorts earns a higher profit than does Column Cruises.
C. both firms do better than if they had both played their dominated strategy.
D. both firms do worse than if they had both played their dominated strategy.
Answer: D
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The real-nominal principle states that
A) what matters to people is the face value of money or income. B) people respond more to explicit, or real, costs than to implicit costs. C) people respond more to implicit costs than to explicit costs. D) what matters to people is the purchasing power of money or income.
If the consumption function is expressed as C = a + mpc × YD, then "mpc" represents
A) autonomous consumer expenditure. B) the marginal propensity to consume. C) the expenditure multiplier. D) disposable income.