Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) making a decision to advertise or not. Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm A and firm B choose not to advertise.
B) Both firm A and firm B choose to advertise.
C) Firm A chooses to advertise while firm B chooses not to advertise.
D) Firm A chooses not to advertise while firm B chooses to advertise.
B
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In determining whether a further investment in education for an individual is worth the costs, an economist would look at whether the sum of the
A. annual education costs is exceeded by the sum of the increases in income that are attributable to the increased education. B. present value of the annual education costs is exceeded by the sum of the present value of the annual income to the person. C. annual education costs is exceeded by the sum of annual income to the person. D. present value of the annual education costs is exceeded by the sum of the present value of the increases in income that are attributable to the increased education.