When cost and demand are stable over time in an industry, repetition of Prisoners' Dilemma situations
A) can yield cooperative outcomes because firms can explicitly collude to set prices.
B) can yield cooperative outcomes even when firms do not explicitly collude to set prices.
C) cooperative or noncooperative outcomes may occur, but cooperation is harder than when the market is unstable.
D) will tend to yield noncooperative outcomes.
E) will always yield noncooperative outcomes.
B
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Some economists argue that the short-run Phillips curve is not vertical, and that monetary policy can be effective in the short run. Which one of the following is not one of the reasons for this skepticism?
A) Individuals may not be able to use information of Fed Policy to make a reliable forecast of inflation. B) Empirical evidence shows workers and firms have rational expectations. C) Contracts with workers and suppliers may hinder firms' abilities to adjust to price changes. D) Wages and prices may not adjust rapidly enough to keep the short-run Phillips curve vertical.
Which of the following tests can be used to check for cointegration between two series?
A. Wald test B. Breush-Pagan test C. White test D. Engle-Granger test