Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900.The clear outcome of this game is that:
A. neither Joe nor Sam will cut his price.
B. Sam will cut his price and Joe won't.
C. both Joe and Sam will cut their price.
D. Joe will cut his price and Sam won't.
Answer: C
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In the Solow growth model, countries with identical total factor productivities, identical labor force growth rates, and identical savings rates
A) always have identical levels of capital per worker and output per worker. B) in equilibrium, have identical levels of capital per worker and output per worker. C) in equilibrium, have identical levels of capital per worker but not necessarily identical levels of output per worker. D) in equilibrium, have identical levels of output per worker but not necessarily identical levels of capital per worker.
Which of the following would be an example of direct foreign investment in DVCs?
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