Two players who are both playing tit-for-tat can quickly find their way toward:
A. a cycle of cooperation and noncooperation, similar to a business cycle.
B. noncooperative outcomes for the remaining rounds.
C. lasting cooperation.
D. None of these statements is true.
Answer: C
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According to your textbook, which procedure is the general rule to follow in order to maximize net revenue?
A) Always choose a 25 percent markup if demand is inelastic. B) Always choose a 25 percent markup if demand is elastic. C) Always choose a markup between 50 and 100 percent (inclusively) if demand in inelastic. D) Always choose no more than a 10 percent markup if demand is perfectly elastic. E) None of the above.
Firms in a small economy planned that inventories would grow over the past year by $300,000. Over that year, inventories actually grew by $400,000. This implies that
A) aggregate expenditure that year was less than GDP that year. B) aggregate expenditure that year was equal to GDP that year. C) there was a planned decrease in inventories that year. D) there was an unplanned decrease in inventories that year.