One clear function for the government to play in an economy is to:
a. Promote research and development by providing tax breaks to domestic industries that will eventually be able to compete internationally.
b. To provide needed goods and services that otherwise would not be provided effectively and/or efficiently by the private sector.
c. Levy tariffs and other forms of protection to protect infant industries that will grow to international stature in the future.
d. Run deficits when a nation is growing and surpluses when it is contracting.
.B
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Suppose a 20 percent increase in the price of gasoline results in a 25 percent increase in the quantity supplied. This response means that gasoline has
A) an elastic supply. B) an inelastic supply. C) a unit elastic supply. D) an inelastic demand. E) an elastic demand.
What is meant by the first-mover advantage? How does commitment matter in a game with a first-mover advantage? a. Some games have a first-mover advantage and others do not. Suppose you were playing rock-paper-scissors as an extensive form game
First you choose rock, or paper, or scissors and then your opponent makes a choice. Is there a first-mover advantage in this game? b. Two firms are thinking of entering a new market. If only one enters, it will make high profits. If two firms enter, then both will suffer losses. Suppose that the game is played sequentially, with Firm 1 deciding first. Does this game have a first-mover advantage?