To analyze intra-industry trade, we must bring in imperfect competition, and we change our assumptions about our trade models to allow:

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $128,000 a year

Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

The above figure shows the payoff matrix for two firms, A and B, selecting an advertising budget. The firms must choose between a high advertising budget and a low advertising budget. A Nash equilibrium is that

A) firm A selects a high advertising budget and firm B selects a low advertising budget. B) firm A selects a low advertising budget and firm B selects a high advertising budget. C) both firms select a high advertising budget. D) both firms select a low advertising budget.