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The firm’s profit is 

Questions 49 to 50 refer to the following. Consider two firms, A and B, deciding whether to charge a Low price or a High price. Their strategic interaction and profits received are depicted in the payoff matrix below (in thousands of dollars).   Which of the following statements is correct?

The Nash equilibrium is

Questions 41 to 43 refer to the following. Consider a firm that produces organic breakfast cereals. The market for breakfast cereals is monopolistically competitive. The figure below shows the demand curve that the firm faces (D), marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). The firm produces ________ thousand boxes of cereals per day and sets a price of ________ a box.

An explanation for the slope of the IS curve is that as the interest rate increases, the quantity of investment ______, and this shifts planned aggregate expenditure  ______, thereby decreasing income.

Derive the equation of the LM curve. A)   B)

Consider an economy that is overheating. If the government intervenes, the policy prescription would be

Along any given IS curve

Questions 16 to 17 refer to the following. IS-LM behavior in a country is characterized as follows. Autonomous consumption spending is 170, the marginal propensity to consume is 0.6, investment is

In the IS and LM model, an increase in government spending ________ the interest rate, which ________ planned aggregate expenditure, resulting in a final increase in output________ than what the government spending increase would have produced in the Keynesian cross model.