Xavier is a baseball player negotiating a contract to play for a team for one year. He is usually paid $10 million a year for playing, but the salary caps for his team means that he will have to be paid $5 million this year and the remainder next year. If the interest rate is 8 percent, how much should that remaining amount be next year?

Refer to the scenario above. The sum of the firms' payoffs is maximum when ________

A) both the firms choose Strategy X B) both the firms choose Strategy Y C) Firm A chooses Strategy X, and Firm B chooses Strategy Y D) Firm A chooses Strategy Y, and Firm B chooses Strategy X

In an arms race between two nations, both would be better off if _____

a. they could agree not to engage in the arms buildup b. if more countries entered the arms race c. one nation controlled more resources than the other d. a conflict broke out in another part of the world