Based on the 'early incarnation' of the Phillips curve, explain what effect an increase in the unemployment rate will have on the inflation rate
What will be an ideal response?
An increase in u will cause a reduction in W. As W falls, firms' costs fall. As firms' costs fall, they will reduce the price level. This reduction in the price level represents, in this case, deflation.
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A tit for tat strategy a. Generates the same result as the prisoner's dilemma
b. Provides a way to punish rivals who defect from the jointly optimum behavior c. Means that a firm would cooperate as long as other firms cooperated. d. Both b. and c. are true
The figure below shows the retail demand for running shoes. If the distributor (the retailer) is a monopoly and the marginal cost of distributing the shoes is $20 per pair, the manufacturer's wholesale demand curve lies
A) $20 below the retail demand curve, D.
B) $20 below the retail marginal revenue curve, MR.
C) $20 above the retail demand curve, D.
D) $20 above the retail marginal revenue curve, MR.