Voluntary exchange
A) is the only way to eliminate scarcity.
B) is a nonprice rationing device.
C) is trading so that the consumer and producers are better off.
D) involves no transactions costs.
Answer: C
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State provision of free healthcare may encourage individuals to engage in unhealthy behavior, such as excessive smoking or consumption of alcohol. This is an example of ________
A) moral hazard B) a positive externality C) adverse selection D) anchoring
Refer to the payoff matrix below. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
Cruise R Us and Cruise the World compete in the cruise line industry. Each firm needs to determine if they are going to offer special cruise packages with special rates or not offer the specials. The above payoff matrix shows the firms' net economic profit for each set of strategies.
A) Cruise R Us No Specials and Cruise the World No Specials is a Nash equilibrium.
B) There are no Nash equilibria in this game.
C) Cruise R Us Specials and Cruise the World No Specials is a Nash equilibrium.
D) Cruise R Us Specials and Cruise the World Specials is a Nash equilibrium.