Refer to the payoff matrix. Suppose that Speedy Bike and Power Bike are the only two bicycle manufacturing firms serving the market. Both can choose large or small advertising budgets. If this is a repeated game with no cooperation or reciprocity, which cell represents the final outcome we would expect to occur?

An inward shift of the production possibilities curve

A. represents an economic decline. B. means that the previous levels of production are now unobtainable except under unusual circumstances such as war. C. means that the economy can produce more of both goods. D. represents an economic decline AND means that the previous levels of production are now unobtainable except under unusual circumstances such as war.

The formula for the aggregate consumption function is [C = a + b(Y - T)] ________ the income-expenditure model.

A. after net exports are added to B. when consumption is left out of C. after government is subtracted from D. after government is added to