Q&A Hero

Q: If leisure is a normal good, then the income effect of a decrease in wage will A) decrease the number of hours worked. B) increase the number of hours worked. C) decrease the number of leisure hours. D) increase the sum of leisure plus hours worked.

Q: Scenario 14.1: You are the manager of a firm producing green chalk. The marginal product of labor is: MPL = 24L-1/2 Suppose that the firm is a competitor in the green chalk market. The price of green chalk is $1 per unit. Further suppose that the firm is a competitor in the labor market. The wage rate is $12.00 per hour. Given the information in Scenario 14.1, how much labor will be hired to maximize profit? A) 1/16 B) 1/2 C) 1 D) 4

Q: Scenario 14.1: You are the manager of a firm producing green chalk. The marginal product of labor is: MPL = 24L-1/2 Suppose that the firm is a competitor in the green chalk market. The price of green chalk is $1 per unit. Further suppose that the firm is a competitor in the labor market. The wage rate is $12.00 per hour. Given the information in Scenario 14.1, what is the marginal revenue product of labor? A) 5L-1/2 B) 2L-1/2 C) 12L-1/2 D) 24L-1/2

Q: If the market for labor is perfectly competitive, the profit maximizing level of labor occurs where A) MRPL < W (the wage). B) MRPL = P (the output price). C) MRPL just exceeds W. D) MRPL = W. E) none of the above

Q: In the competitive output market for good Q, the marginal revenue product for an input X can be expressed asA) MPX / TRQ.B) MPQ MRX.C) APX MRQ.D) MPX* PQ

Q: What can account for the negative slope of the marginal revenue product curve? A) Diminishing marginal utility B) Diminishing marginal returns C) Monopsony power D) All workers eventually begin slacking. E) none of the above

Q: Other things being equal, the marginal revenue product (MRP) curve for a competitive seller A) lies below the MRP curve for a monopolist. B) is identical to the MRP curve for a monopolist. C) lies above the MRP curve for a monopolist. D) is upward sloping whereas a monopolist has a downward sloping MRP curve.

Q: The marginal revenue product can be expressed as the A) additional revenue received from selling one more unit of product. B) increment to revenue received from one additional unit of input hired. C) marginal physical product of an input times the average revenue received from the sale of the product. D) average physical product of the input times the marginal revenue received from the sale of the final product.

Q: The marginal revenue product of labor is equal toA) MPL P.B) MPL / P.C) MPL* MR.D) MPL / MRE) MR / MPL

Q: A firm should hire more labor when the marginal revenue product of labor A) equals the wage rate. B) exceeds the wage rate. C) is less than the wage rate. D) Any of these can be true. E) None of these are true.

Q: What does it mean to say that a game is in "extensive form"? A) Strategies are described, rather than just numbered. B) All payoffs are shown. C) The game is presented as a matrix. D) The game is presented as a decision tree. E) The game is written out as often as the situation calls for it to be played.

Q: An oligopolistic situation involving the possible creation of barriers to entry would probably best be modeled by a A) cooperative game. B) Prisoners' Dilemma game. C) Battle of the Sexes game. D) repeated game. E) sequential game.

Q: In the sequential version of a game using the same players, the same strategies, and the same possible outcomes as the original game, the equilibrium A) may be different than in the original game. B) must be different than in the original game. C) will be the same as in the original game. D) is the same as the cooperative version of the original game. E) is the same as the noncooperative version of the original game.

Q: A "sequential game" is A) another term for a repeated game. B) another term for a cooperative game. C) the term for a game in which individuals receive their payoffs at different times. D) the term for a game in which individuals do not commit to strategy choices at the same time. E) the term for a game in which each outcome occurs, one after the other, as the game is repeated over time.

Q: Once the state environmental protection agency devises its new policy to protect the environment, firms decide whether to remain in the state or move their operations to a neighboring state. In the language of game theory, this is an example of: A) a cooperative game. B) a sequential game. C) a threat. D) the Prisoner's dilemma.

Q: The widget market is controlled by two firms: Acme Widget Company and Widgetway Manufacturing. The structure of the market makes secret price cutting impossible. Each firm announces a price at the beginning of the time period and sells widgets at the price for the duration of the period. There is very little brand loyalty among widget buyers so that each firm's demand is highly elastic. Each firm's prices are thus very sensitive to inter-firm price differentials. The two firms must choose between a high and low price strategy for the coming period. Profits (measured in thousands of dollars) for the two firms under each price strategy are given in the payoff matrix below. Widgetway's profit is before the comma, Acme's is after the comma. a. Does either firm have a dominant strategy? What strategy should each firm follow? b. Assume that the game is to be played an infinite number of times. (Or, equivalently, imagine that neither firm knows for certain when rounds of the game will end, so there is always a positive chance that another round is to be played after the present one.) Would the tit-for-tat strategy would be a reasonable choice? Explain this strategy. c. Assume that the game is to be played a very large (but finite) number of times. What is the appropriate strategy if both firms are always rational?

Q: Why does cooperative behavior break down in games with finite endpoints? A) Each player has an incentive to deviate from a cooperative strategy during the last period. B) A Nash equilibrium in pure strategies is not possible in finite repeated games. C) Finite games have the same outcomes as one-period games, and cooperation is not possible in one-period games. D) A Nash equilibrium is only possible in mixed strategies in finite repeated games, but all of the probabilities assigned to particular strategies approach zero as the number of finite game periods becomes large. Thus, we cannot evaluate the expected payoffs in these games.

Q: Which of the following situations is likely to generate noncooperative behavior in repeated games? A) The game is repeated a finite number of times. B) There are many players in the game. C) The payoffs can change rapidly from one game period to the next. D) All of these situations can generate noncooperative behavior.

Q: For infinitely repeated games in which the players follow a tit-for-tat strategy, which one of the following outcomes is NOT possible? A) The players cooperate with one another until someone decides to not cooperate, and then the other players will not cooperate for some period of time. B) There can be dominant strategies. C) If the information about another player's action is limited, then some cooperative actions may be incorrectly interpretted as "not cooperate." D) All of the above are possible outcomes.

Q: When cost and demand are stable over time in an industry, repetition of Prisoners' Dilemma situations A) can yield cooperative outcomes because firms can explicitly collude to set prices. B) can yield cooperative outcomes even when firms do not explicitly collude to set prices. C) cooperative or noncooperative outcomes may occur, but cooperation is harder than when the market is unstable. D) will tend to yield noncooperative outcomes. E) will always yield noncooperative outcomes.

Q: Scenario 13.11 Consider the game below: In the game in Scenario 13.11, equilibrium is A) R1, C1. B) R1, C2. C) R2, C1. D) R2, C2. E) a mixed strategy based on all four pure strategies.

Q: Scenario 13.11 Consider the game below: What kind of game is shown in Scenario 13.11? A) Axelrod's Paradox B) Stackelberg Match C) Prisoners' Dilemma D) Cournot's Duopoly Game E) It is not possible to tell what kind of game it is because the strategies have not been identified.

Q: Scenario 13.11 Consider the game below: What is true about dominant strategies in the game in Scenario 13.11? A) R1 and C1 are dominant strategies. B) R1 and C2 are dominant strategies. C) R2 and C1 are dominant strategies. D) R2 and C2 are dominant strategies. E) There are no dominant strategies.

Q: It can be rational to play tit-for-tat in a repeated Prisoners' Dilemma game A) only if the game is played an infinite number of times. B) if the game is played an infinite number of times, or if it is uncertain how many times it will be played. C) only if the game is played a finite number of times, and that number is known by all the players in advance. D) for n-1 of the n periods it will be played, if n is known in advance. E) at no time; tit-for-tat is an irrational strategy in this situation.

Q: The strategy that worked best in Axelrod's experiments using the Prisoners' Dilemma game was to A) play the "cooperate" ("don't confess") strategy. B) play the "defect" ("confess") strategy. C) alternate between "cooperate" and "defect" strategies. D) play the "cooperate" strategy at first, and from then on do whatever the other player did in the previous round, cooperating if the other player did, and defecting if the other player did. E) play the "cooperate" strategy in the first round, and from then on cooperate so long as the other player does, but if the other player defects, then play the "defect" strategy from that time forward.

Q: Repetition of a game A) yields the same outcome, over and over. B) can result in behavior that is different from what it would be if the game were played only once. C) is not possible. D) makes cooperative games into non-cooperative games. E) is possible only if the payoffs in the matrix change.

Q: A "Credible Threat" A) is also called a "tit-for-tat" strategy. B) always set a low price. C) minimizes the return of your opponent. D) is a strategy selection that is in your best interest. E) provides the best return for both players.

Q: G.C. Donovan Company is a large pharmaceutical company located in the U.S., but with worldwide sales. Donovan has recently developed two new medications that have been licensed for sale in European Union countries. One medication is an over-the-counter cold preparation that effectively eliminates all cold symptoms, while the other is an antibiotic that is effective against drug resistant bacteria. A European firm, Demtech Limited, has developed drugs that are similar to Donovan's and will be ready for the European market at approximately the same time. Liability concerns make it unlikely that either firm will choose to market both new drugs at this time. Both firms do plan to market one of the drugs this year. Donovan's managers consider their own lack of reputation among European physicians to be an important obstacle in the antibiotic market. Consequently, Donovan feels more comfortable marketing the cold preparation. Demtech, on the other hand, has an excellent reputation among physicians but little experience in over-the-counter drugs so that Demtech's competitive advantage is with the antibiotic. Should Demtech choose to market the cold remedy, it believes that its sales will increase if Donovan also enters the cold remedy market and advertises heavily. Similarly, Donovan anticipates that its sales in the antibiotic market would be enhanced if Demtech produces antibiotics, given Demtech's excellent reputation among physicians. In short, each firm believes that there are circumstances under which participation by the other firm will complement rather than compete with the firm's own sales. Profits in millions of dollars are given in the payoff matrix below. a. Given the table above, does either firm have a dominant strategy? Is there a Nash equilibrium? (Explain the difference between a Nash equilibrium and a dominant strategy.) b. Pharmaceutical firms within the EU are attempting to organize a risk pool that would share liability risks for new drugs. Since Donovan and Demtech are among the largest pharmaceutical companies operating in Europe, the benefits of the risk pool depend upon the participation of the other firm. Increased profits achieved through reduced risk liability (measured in millions of dollars) are shown in the payoff matrix below. Does either firm have an incentive to use participation in the risk pool as a bargaining device in the drug-marketing decision? If so, what would be the nature of the bargain? How credible is the firm's bargaining position? What could be done to make the bargaining position more credible?

Q: Consider two firms, X and Y, that produce super computers. Each can produce the next generation super computer for the military (M) or for civilian research (C). However, only one can successfully produce for both markets simultaneously. Also, if one produces M, the other might not be able to successfully produce M, because of the limited market. The following payoff matrix illustrates the problem. a. Find the Nash equilibrium, and explain why it is a Nash equilibrium. b. If Firm X were unsure that the management of Firm Y were rational, what would Firm X choose to do if it followed a maximin strategy? What would both firms do if they both followed a maximin strategy?

Q: Two firms at the St. Louis airport have franchises to carry passengers to and from hotels in downtown St. Louis. These two firms, Metro Limo and Urban Limo, operate nine passenger vans. These duopolists cannot compete with price, but they can compete through advertising. Their payoff matrix is below: a. Does each firm have a dominant strategy? If so, explain and what that strategy is. b. What is the Nash equilibrium? Explain where the Nash equilibrium occurs in the payoff matrix.

Q: Consider the Battle of the Sexes game: Jim- wrestling Jim - opera Joan - wrestling 2, 1 0, 0 Joan - opera 0, 0 1, 2 Suppose both players use maximin strategies for this game. Is there a clear equilibrium outcome to the game in this case? A) Yes, both players select wrestling B) Yes, both players select opera C) No, both players face the minimum payoff (0) under both actions. D) We do not have enough information to answer this question.

Q: Consider the Battle of the Sexes game: Jim- wrestling Jim - opera Joan - wrestling 2, 1 0, 0 Joan - opera 0, 0 1, 2 Suppose both players use mixed strategies for this game. Jim chooses wrestling with probability 0.9, and Joan chooses wrestling with probability 0.5. What are the expected payoffs for the players? A) The expected payoffs are 0.95 for Joan and 0.55 for Jim B) The expected payoffs are 0.55 for Joan and 0.95 for Jim C) The expected payoffs are 0.95 for both players D) The expected payoffs are 0.55 for both players

Q: Consider the Matching Pennies game: Player B - heads Player B - tails Player A - heads 1, -1 -1, 1 Player A - tails -1, 1 1, -1 Suppose both players use maximin strategies for this game. Is there a clear equilibrium outcome to the game in this case? A) Yes, both players select heads B) Yes, both players select tails C) No, both players face the minimum payoff (-1) under both actions. D) We do not have enough information to answer this question.

Q: Consider the Matching Pennies game: Player B - heads Player B - tails Player A - heads 1, -1 -1, 1 Player A - tails -1, 1 1, -1 Suppose Player A always uses a pure strategy that selects heads, and Player B always uses a pure strategy that selects tails. Is this outcome a Nash equilibrium? A) Yes, both players have no incentive to change their actions. B) No, Player A would want to switch to tails. C) No, Player B would want to switch to heads. D) No, Player B would want to switch to tails.

Q: Consider the Matching Pennies game: Player B - heads Player B - tails Player A - heads 1, -1 -1, 1 Player A - tails -1, 1 1, -1 Suppose Player A always uses a pure strategy that selects heads. What is Player B's optimal response to this pure strategy? A) Always select heads. B) Always select tails. C) Mixed strategy with probability 1/2 on heads and 1/2 on tails D) There is no optimal pure or mixed strategy for this situation.

Q: Consider the Matching Pennies game: Player B - heads Player B - tails Player A - heads 1, -1 -1, 1 Player A - tails -1, 1 1, -1 Suppose Player B always uses a mixed strategy with probability of 3/4 for head and 1/4 for tails. Which of the following strategies for Player A provides the highest expected payoff? A) Mixed strategy with probability 1/4 on heads and 3/4 on tails B) Mixed strategy with probability 1/2 on heads and 1/2 on tails C) Mixed strategy with probability 3/4 on heads and 1/4 on tails D) Pure strategy in which Player A always selects heads

Q: The Matching Pennies game is an example of a: A) constant-sum game. B) nonconstant sum game. C) game with an equilibrium in dominant strategies. D) none of the above

Q: Scenario 13.10Consider the game below:In the game in Scenario 13.10, there isA) a mixed strategy equilibrium, and no other.B) a mixed strategy and a pure strategy equilibrium.C) a mixed strategy and two pure strategy equilibria.D) a mixed strategy and four pure strategy equilibrium.E) no equilibrium in either mixed or pure strategies.

Q: Scenario 13.10Consider the game below:Which of the below outcomes is the result of a Nash equilibrium in pure strategies for the game in Scenario 13.10?A) -5, 5B) 10, -10C) 8, -8D) 0, 0E) There is no pure strategy equilibrium in this game.

Q: Scenario 13.10Consider the game below:The game in Scenario 13.10 isA) variable-sum.B) constant-sum.C) cooperative.D) a Prisoners' Dilemma.E) a Cournot Production Cross.

Q: Scenario 13.10Consider the game below:What is true about dominant strategies in the game in Scenario 13.10?A) "Use more caffeine" and "have a sweepstakes" are dominant strategies.B) "Use more caffeine" and "create a diet soda" are dominant strategies.C) "Make animal-shaped bottles" and "have a sweepstakes" are dominant strategies.D) "Make animal-shaped bottles" and "create a diet soda" are dominant strategies.E) There are no dominant strategies.

Q: A "mixed strategy" equilibrium means that A) the strategies chosen by the players represent different behaviors. B) one player has a dominant strategy, and one does not. C) one player has a pure strategy, and one does not. D) the equilibrium strategy is an assignment of probabilities to pure strategies. E) the equilibrium strategy involves alternating between a dominant strategy and a Nash strategy.

Q: Scenario 13.9Consider the following game:Two firms are situated next to a lake, and it costs each firm $1,500 per period to use filters that avoid polluting the lake. However, each firm must use the lake's water in production, so it is also costly to have a polluted lake. The cost to each firm of dealing with water from a polluted lake is $1,000 times the number of polluting firms.Refer to Scenario 13.9. If this game is repeated over an infinite or uncertain horizon, the most likely observed behavior will be thatA) both firms pollute.B) only Lago pollutes.C) only Nessie pollutes.D) neither firm pollutes.E) the firms alternate polluting in different periods.

Q: Scenario 13.9Consider the following game:Two firms are situated next to a lake, and it costs each firm $1,500 per period to use filters that avoid polluting the lake. However, each firm must use the lake's water in production, so it is also costly to have a polluted lake. The cost to each firm of dealing with water from a polluted lake is $1,000 times the number of polluting firms.Refer to Scenario 13.9. The equilibrium of this game, if played only once, is thatA) both firms pollute.B) only Lago pollutes.C) only Nessie pollutes.D) neither firm pollutes.E) the firms choose a mixed strategy.

Q: Scenario 13.9Consider the following game:Two firms are situated next to a lake, and it costs each firm $1,500 per period to use filters that avoid polluting the lake. However, each firm must use the lake's water in production, so it is also costly to have a polluted lake. The cost to each firm of dealing with water from a polluted lake is $1,000 times the number of polluting firms.Refer to Scenario 13.9. What kind of game is being played by Lago and Nessie?A) Battle of the Sexes.B) Prisoners' Dilemma.C) Beach Location.D) Stackelberg Output Choice.E) Cournot Output Choice.

Q: Scenario 13.9Consider the following game:Two firms are situated next to a lake, and it costs each firm $1,500 per period to use filters that avoid polluting the lake. However, each firm must use the lake's water in production, so it is also costly to have a polluted lake. The cost to each firm of dealing with water from a polluted lake is $1,000 times the number of polluting firms.What is true about dominant strategies in the game in Scenario 13.9?A) "Pollute" is a dominant strategy for both firms.B) "Pollute" is a dominant strategy for Lago only.C) "Don't Pollute" is a dominant strategy for both firms.D) "Don't Pollute" is a dominant strategy for Lago only.E) There are no dominant strategies.

Q: Scenario 13.8 Consider the following game: In game in Scenario 13.8, what will occur if IVY Corp. plays a maximin strategy? A) $1, $10 B) $1, -$5000 C) $2, $0 D) $2, $2 E) There is a .25 chance of each outcome in that case.

Q: Scenario 13.8 Consider the following game: In game in Scenario 13.8, what is the Nash equilibrium? A) The strategy pair associated with $1, $10. B) The strategy pair associated with $2, $0. C) The strategy pair associated with $1, -$5000. D) The strategy pair associated with $2, $2. E) There is no Nash equilibrium in pure strategies.

Q: Scenario 13.8 Consider the following game: In game in Scenario 13.8, A) Y is a dominant strategy for IVY Corp. B) Z is a dominant strategy for IVY Corp. C) A is a dominant strategy for SAC Group. D) B is a dominant strategy for SAC Group. E) No firm has a dominant strategy.

Q: Scenario 13.8 Consider the following game: The game in Scenario 13.8 is A) variable-sum. B) constant-sum. C) cooperative. D) a Prisoner's Dilemma. E) a Conjoint Crux.

Q: Scenario 13.7:Consider the game below about funding and construction of a dam to protect a 1,000-person town. Contributions to the Dam Fund, once made, cannot be recovered, and all citizens must contribute $1,000 to the dam in order for it to be built. The dam, if built, is worth $70,000 to each citizen.Refer to the game in Scenario 13.7. If each player chose a maximin strategy, the outcome would beA) $69,000, $69,000.B) $0, -$1000.C) -$1000, $0.D) $0, $0.E) a mixed strategy equilibrium.

Q: Scenario 13.7:Consider the game below about funding and construction of a dam to protect a 1,000-person town. Contributions to the Dam Fund, once made, cannot be recovered, and all citizens must contribute $1,000 to the dam in order for it to be built. The dam, if built, is worth $70,000 to each citizen.In the game in Scenario 13.7, the strategy pair that paysA) $69,000 to each player is the only equilibrium.B) ($0, -$1000) is the only equilibrium.C) (-$1000, $0) is the only equilibrium.D) $0 to each player is the only equilibrium.E) $69,000 to each player and the strategy pair that pays $0 to each player are equilibria.

Q: Scenario 6 Consider the following game. Payoffs are in millions of dollars. Refer to the game in Scenario 13.6. What will occur if ERS Co. plays a maximin strategy? A) -$100, -$1 B) $2, -$0.5 C) $1, -$1 D) -$0.5, -$0.5 E) There is a 0.25 chance of each outcome in that case.

Q: Scenario 6 Consider the following game. Payoffs are in millions of dollars. In the game in Scenario 13.6, what is the Nash equilibrium? A) The strategy pair associated with -$100, -$1. B) The strategy pair associated with $2, -$0.5. C) The strategy pair associated with $1, -$1. D) The strategy pair associated with -$0.5, -$0.5. E) There is no Nash equilibrium in pure strategies.

Q: Scenario 6 Consider the following game. Payoffs are in millions of dollars. In the game in Scenario 13.6, A) "Poison Pill" is a dominant strategy for Lawrence LLP. B) "Dump" is a dominant strategy for Lawrence LLP. C) "TurboTech" is a dominant strategy for ERS Co. D) "ZamboniTech" is a dominant strategy for ERS Co. E) No firm has a dominant strategy.

Q: The relationship between a pure-strategy Nash equilibrium and a dominant-strategy equilibrium is that A) a dominant-strategy equilibrium is a special case of a pure-strategy Nash equilibrium. B) a pure-strategy Nash equilibrium is a special case of a dominant-strategy equilibrium. C) they are the same. D) there may not be a dominant-strategy equilibrium, but there always is a pure-strategy Nash equilibrium. E) they are mutually exclusive and exhaustive, in that a dominant-strategy equilibrium is the same thing as a mixed-strategy Nash equilibrium.

Q: Nash equilibria are stable because A) they involve dominant strategies. B) they involve constant-sum games. C) they occur in noncooperative games. D) once the strategies are chosen, no players have an incentive to negotiate jointly to change them. E) once the strategies are chosen, no player has an incentive to deviate unilaterally from them.

Q: In a Nash equilibrium, A) each player has a dominant strategy. B) no players have a dominant strategy. C) at least one player has a dominant strategy. D) players may or may not have dominant strategies. E) the player with the dominant strategy will win.

Q: Use the following statements to answer this question: I. If mixed strategies are allowed, every game has at least one Nash equilibrium. II. The maximin strategy is optimal in the game of "matching pennies." A) Both I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) Both I and II are false.

Q: Andre Agassi, a star tennis player, is playing the number one player in the world, Roger Federer. Before the match, Agassi decided that he would serve 20 percent of his serves to Federer's backhand, 30 percent of his serves to Federer's forehand, and 50 percent of his serves straight at Federer. In the language of game theory, this is known as: A) a pure strategy. B) a dominant strategy. C) a mixed strategy. D) a maximin strategy.

Q: A maximin strategy A) maximizes the minimum gain that can be earned. B) maximizes the gain of one player, but minimizes the gain of the opponent. C) minimizes the maximum gain that can be earned. D) involves a random choice between two strategies, one which maximizes potential gain and one which minimizes potential loss.

Q: A Nash equilibrium occurs when A) each firm is doing the best it can given its opponents' actions. B) each firm chooses the strategy that maximizes its minimum gain. C) a player can choose a strategy that is optimal regardless of its rivals' actions. D) there is no dominant firm in a market.

Q: BuyRight is a chain of grocery stores operating in small cities throughout the southwestern United States. BuyRight's major competition comes from another chain, Acme Food Stores. Both firms are currently contemplating their advertising strategy for the region. The possible outcomes are illustrated by the payoff matrix below. Entries in the payoff matrix are profits. BuyRight's profit is before the comma, Acme's is after the comma. a. Describe what is meant by a dominant strategy. b. Given the payoff matrix above, does each firm have a dominant strategy? c. Under what circumstances would there be no dominant strategy for one or both firms?

Q: Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs: Firm B - low output Firm B - high output Firm A - low output 300, 250 200, 100 Firm A - high output 200, 75 75, 100 What is the Nash equilibrium for this game? A) Both firms producer low levels of output B) Both firms produce high levels of output C) Firm A produces low levels of output, and Firm B produces high output. D) Firm A produces high levels of output, and Firm B produces low output. E) There is more than one Nash equilibrium for this game

Q: Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs: Firm B - low output Firm B - high output Firm A - low output 300, 250 200, 100 Firm A - high output 200, 75 75, 100 What are the dominant strategies in this game? A) Both firms produce low levels of output B) Both firms produce high levels of output C) Firm A's dominant strategy is to produce low levels of output, but Firm B does not have a dominant strategy. D) Firm B's dominant strategy is to produce low levels of output, but Firm A does not have a dominant strategy. E) Neither firm has a dominant strategy

Q: Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs: Firm B - low output Firm B - high output Firm A - low output 300, 250 200, 100 Firm A - high output 200, 75 75, 50 What are the dominant strategies in this game? A) Both firms produce low levels of output B) Both firms produce high levels of output C) Firm A's dominant strategy is to produce low levels of output, but Firm B does not have a dominant strategy. D) Firm B's dominant strategy is to produce low levels of output, but Firm A does not have a dominant strategy. E) Neither firm has a dominant strategy

Q: Use the following statements to answer this question: I. A player must have at least one dominant strategy in a game. II. If neither player in a game has a dominant strategy in a game, then there is no equilibrium outcome for the game. 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.

Q: If both players in a game have dominant strategies, we say that the game has: A) a constant sum. B) a nonconstant sum. C) independence of irrelevant alternatives. D) an equilibrium in dominant strategies.

Q: Scenario 13.5 Consider the following game: In the game in Scenario 13.5, A) there is one equilibrium: for both to expand West. B) there is one equilibrium: for both to expand South. C) there are two equilibria: either can expand in the West, and the other expands in the South. D) there is only a mixed strategies equilibrium. E) all four outcomes are equilibria.

Q: Scenario 13.5 Consider the following game: Which of the following is true regarding the game in Scenario 13.5? A) Only Bull Meat has a dominant strategy. B) Only Deer Meat has a dominant strategy. C) Both companies have a dominant strategy: expand West. D) Both companies have a dominant strategy: expand South. E) Neither company has a dominant strategy.

Q: Scenario 13.4 Consider the following game: In the game in Scenario 13.4, the equilibrium outcome: A) is for both NRG and Vita to sponsor the marathon. B) is for both NRG and Vita to sponsor the TV show. C) is for NRG to sponsor the marathon and Vita to sponsor the TV show. D) is for NRG to sponsor the TV show and Vita to sponsor the marathon. E) does not exist in pure strategies.

Q: Scenario 13.4 Consider the following game: Which of the following is TRUE for the game in Scenario 13.4? A) NRG's dominant strategy is to sponsor the marathon. B) NRG's dominant strategy is to sponsor the TV show. C) Vita's dominant strategy is to sponsor the marathon. D) Vita's dominant strategy is to sponsor the TV show. E) Neither company has a dominant strategy.

Q: Scenario 13.3Consider the following game:In the game in Scenario 13.3, the equilibrium outcome:A) is for Moto to offer a CD changer and Zport to offer low-profile tires.B) is for Moto to offer a CD changer and Zport to offer a sun roof.C) is for Moto to offer free maintenance and Zport to offer low-profile tires.D) is for Moto to offer free maintenance and Zport to offer a sunroof.E) does not exist in pure strategies.

Q: Scenario 13.3Consider the following game:Which of the following is true for the game in Scenario 13.3?A) Moto's dominant strategy is the CD changer.B) Moto's dominant strategy is the free maintenance.C) Zport's dominant strategy is the low-profile tires.D) Zport's dominant strategy is the sun roof.E) Neither company has a dominant strategy.

Q: Scenario 13.2:Consider the following game:In the game in Scenario 13.2, the equilibrium strategiesA) are for both firms to offer rebates.B) is for ABC to offer a rebate, and XYZ not to offer a rebate.C) is for XYZ to offer a rebate, and ABC not to offer a rebate.D) are for both firms to offer no rebate.E) does not exist in pure strategies.

Q: Scenario 13.2:Consider the following game:Which of the following is true about the game in Scenario 13.2?A) ABC's dominant strategy is to offer a rebate.B) ABC's dominant strategy is not offer a rebate.C) XYZ's dominant strategy is to offer a rebate.D) XYZ's dominant strategy is not offer a rebate.E) Both ABC and XYZ offer a rebate as a dominant strategy.

Q: A strategy A is "dominant" for a player X if A) strategy A contains among its outcomes the highest possible payoff in the game. B) irrespective of any of the possible strategies chosen by the other players, strategy A generates a higher payoff than any other strategy available to player X. C) strategy A is the best response to every strategy of the other player. D) strategy A is the best response to the best strategy of the other player. E) every outcome under strategy A generates positive payoffs.

Q: Your economics professor has decided that your class will not be graded on a curve but on an absolute scale. Therefore, it is possible for every student in the class to get an "A." Your grade will not depend in any way on your classmates' performance. Based on this information, you decide that you should study economics three hours each day, regardless of what your classmates do. In the language of game theory, your decision to study three hours each day is: A) a dominant strategy. B) a minimax strategy. C) a maximin strategy. D) a Prisoner's dilemma.

Q: A dominant strategy can best be described as A) a strategy taken by a dominant firm. B) the strategy taken by a firm in order to dominate its rivals. C) a strategy that is optimal for a player no matter what an opponent does. D) a strategy that leaves every player in a game better off. E) all of the above

Q: Which of the following is NOT a key component of every game? A) Strategies B) Players C) Payoffs D) Cooperation