An exchange rate that varies according to supply and demand for the currency in the foreign exchange market is called a ________ exchange rate.

An improvement in technology will shift the production possibilities curve

A) to the left. B) along the curve. C) inward. D) to the right.

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. Is there a Nash equilibrium solution to this game?

A.  There is no possible Nash equilibrium solution.
B.  A Nash equilibrium can occur at either cell B or cell C.
C.  Cell A represents a Nash equilibrium.
D.  Cell D represents a Nash equilibrium.