The ABC Nail Company has entered into a collusive agreement with the other firm in the industry, the DC Nail Company. What occurs in the nail industry if ABC decides to cheat on the agreement?
A) ABC lowers the price of its nails.
B) The total industry output increases.
C) The total profits in the nail industry will decrease.
D) All of the above answers are correct.
D
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In a repeated game, punishments that result in heavy damages are an incentive for players to adopt the strategies that result in a ________ equilibrium
A) contestable B) strategic C) cooperative D) winner-share-all
Answer the following statements true (T) or false (F)
1) U.S. immigrants (legal and illegal combined) have lower prison rates than the native-born population. 2) Illegal immigration has little effect on the average level of wages in the United States. 3) Economic theory suggests that immigration should be allowed into a country until the marginal benefit of the last immigrant is zero. 4) The optimal level of immigration occurs where marginal benefit is at its greatest.