Not all games with two or more Nash equilibria can be solved with pre-play communication because
A) cheap talk may be illegal under anti-trust laws.
B) if there's an incentive for one or more players to lie, then cheap talk lacks credibility.
C) pareto criterion might not be defined.
D) Both A and B
D
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Advantages of specialization do not include: a. reduced interdependence
b. the exploitation of comparative advantage. c. the ability to utilize more complex production processes. d. Productivity gains from learning by doing.
Pretty Polly produces dresses for little girls. At its current advertising level, Pretty Polly's marginal cost of advertising is $500,000 and their marginal benefit is $750,000. Which of the following is true?
A) If the firm increases the amount of advertising, its net profits will decrease. B) The firm is currently maximizing its net profit. C) The firm should increase the amount of advertising to increase its net profit. D) The firm should reduce the amount of advertising to increase its net profit.