When a shortage exists in a market, sellers
a. raise price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
b. can raise price without worrying about the loss of sales, which increases quantity supplied and decreases quantity demanded until the shortage is eliminated.
c. lower price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
d. lower price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
b
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In a mixed-strategy Nash equilibrium, a player is willing to randomize because:
a. this confuses opponents. b. he or she is indifferent between the actions in equilibrium. c. the actions provide the same payoffs regardless of what the other player does. d. he or she does not know what the other player is doing.
Under the natural rate hypothesis, expansionary monetary and fiscal policies can at best produce a:
a. permanent change in the unemployment rate. b. short-run change in the unemployment rate. c. permanent change in the inflation rate. d. short-run change in the long-run Phillips curve.