Use the Following Statements to Answer This Question: I

question 70

Multiple Choice

Use the following statements to answer this question: I. A positive deadweight loss necessarily occurs in labor markets that have one seller (e.g., labor union) .
II) The deadweight loss in a labor market with one seller (e.g., labor union) is smaller if the union maximizes the total wages earned by union members than if the union maximizes total economic rents.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false.
• D) I and II are false.

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Definitions:

Sequential Game

A strategic game where players make decisions one after another, with later players having knowledge of the previous actions.

Equilibrium

A situation where market demand equals supply, causing price levels to remain unchanged.

Mixed Strategies

A strategy in game theory where a player chooses probabilistically between different actions to prevent predictability.

Sequentially Played Game

A strategic situation or game where players make moves one after another, each aware of the preceding players’ decisions, often analyzed in game theory to predict outcomes.