A prisoner's dilemma is a game in which:
A. the players' payoffs are smaller when both play their dominant strategy compared to when both play a dominated strategy.
B. neither player has a dominant strategy.
C. the players' payoffs are larger when both play their dominant strategy compared to when both play a dominated strategy.
D. one player has a dominant strategy and the other does not.
Answer: A
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In order to keep the real wage rate constant, the
A) inflation rate must be exactly one half of the expected inflation rate. B) money wage rate must increase by the same amount as the inflation rate. C) money wage rate must increase when the price level falls. D) money wage rate must decrease by the same amount as the inflation rate. E) nominal interest rate must be equal to the inflation rate.
When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars. The fact that the CPI does not fully account for such changes in consumer behavior is called
A) outlet bias. B) increase in quality bias. C) substitution bias. D) discrimination bias.