The prisoners' dilemma is a game in which
A) the dominant strategy for all participants is the best outcome no matter what the other side does.
B) the dominant strategy is to cooperate.
C) only one of the firms is able to make above-normal profits.
D) each firm, in making decisions on the basis of its own self-interest, also makes decisions that benefit the group as a whole.
Answer: A
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Which of the following firms is most likely to use cost-plus pricing?
A) A firm that makes many products but has a small research and development budget, the cost of which can be easily assigned to the different product lines. B) A firm that sells one product and has a sizable research and development budget. C) A firm that makes several products and has a sizable research and development budget, the cost of which cannot be easily assigned to each product. D) A firm that makes one product.
One of the disadvantages of a fixed exchange rate system is: a. too much stability in exchange rates
b. import and export industries forego the benefits of highly variable exchange rates. c. that to maintain fixed exchange rates, nations must give up control of their monetary policies. d. None of the above are disadvantages of a fixed exchange rate system.