Refer to Figure 4.2. A Nash equilibrium exists
A) only where all three players go to the movie theater.
B) only where all three players go to the bowling alley.
C) where all three players go to the movie theater and where all three players go to the bowling alley.
D) These is no Nash equilibrium in this game.
C
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There are many reallife examples of factorintensity differences across the same industries in different nations. How does the HeckscherOhlin model handle this?
A. The HO model makes no assumptions about different factor intensities. B. The HO model assumes that all firms require equal amounts of capital and labor just to be on the safe side. C. The HO model ignores the possibility of different factor intensities and instead assumes that each industry has the same factor intensity in every nation. This assumption enables the model to predict trade based on other factors. D. Actually, the factorintensity reversal issue does not change the predictive value of the model.
During a recession:
a. Net exports tend to rise. b. Consumption tends to rise. c. Net exports remain unchanged. d. Businesses tend to invest more in new plant and equipment. e. Inventories tend to fall as businesses sell them off.