Author Question: Refer to Figure 14-3. What is the equilibrium outcome in this game and is this a subgame-perfect ... (Read 171 times)

vicotolentino · **on:** Jun 29, 2018

Refer to Figure 14-3. What is the equilibrium outcome in this game and is this a subgame-perfect equilibrium?

A) In the equilibrium, Odeon offers 40 per copy of the software package and is accepted but this is not a subgame-perfect equilibrium.
B) There is no equilibrium in this game.
C) Odeon's offer of 40 per copy of the software package is accepted and this is a subgame-perfect equilibrium.
D) In the equilibrium, Odeon offers 30 per copy of the software package and is rejected, and this is a subgame-perfect equilibrium.

Question 2

Consumption spending is 22 million, planned investment spending is 7 million, actual investment spending is 7 million, government purchases are 9 million, and net export spending is 3 million.

Based on this information, which of the following is true?
A) Aggregate expenditure is equal to GDP. B) Aggregate expenditure is greater than GDP.
C) Aggregate expenditure is less than GDP. D) There was an unplanned change in inventories.