Relating to the Economics in Practice on page 253: Ethanol subsidies have increased the supply of corn, and ethanol is a fuel produced from corn. As a result, ________ farm land has increased. Further, supply of ________ has decreased.

Refer to Figure 14-7. Uniguest, Inc is a company that provides PCs with internet access and touch-sensitive screens to hotels

Suppose the Hard Rock Hotel and Casino in Las Vegas informs Uniguest that it is considering installing these systems in its hotel rooms. The Hard Rock expects to be able to charge higher prices for these rooms if it installs Uniguest's systems in its rooms. The two companies begin bargaining over what price the Hard Rock will pay Uniguest for its systems, and the decision tree shown above illustrates this bargaining game. Note that the profit figures listed in the decision tree are additional profits for the Hard Rock and total profits for Uniguest. a. Suppose the Hard Rock offers Uniguest $1,200 per system. Will Uniguest accept or reject this offer? Why? b. Suppose the Hard Rock offers Uniguest $800 per system. Will Uniguest accept or reject this offer? Why? c. Suppose Uniguest attempts to obtain a favorable outcome from the bargaining by telling the Hard Rock it will reject an $800-per-system offer. If the Hard Rock does not believe the threat is credible, what will it do? Why? What will Uniguest do? Why? d. Is there a subgame-perfect equilibrium in this situation? Explain.

Deficits that arise from discretionary fiscal policy lead to: a. increased private demand for money, which is offset by the sale of more government securities

b. decreased private demand for money, which is offset by the sale of more government securities and higher interest rates c. increases in the number of government securities sold to the public and higher interest rates. d. decreases in the number of government securities sold to the public and higher interest rates. e. increases in the public's demand for money and increases in the number of government securities sold to the public, leading to lower interest rates.