This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.The outcome of the game in the figure shown predicts that Starbucks will earn profits of:

Referring to Figure 19.2, the effect of a decrease in Japanese interest rates is represented by a movement from point

A) a to d. B) b to c. C) b to a. D) a to b.

Which of the following is a possible market solution to the lemons problem?

A) Producers might offer product guarantees and warranties. B) Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products. C) Government agencies might be charged with directly overseeing production and distribution of certain products. D) Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly.