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All games involve which of the following?


A) Strategies
B) Someone to enforce the rules
C) Cards or dice
D) Full information

E) A) and D)
F) C) and D)

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According to the figure shown, adidas: A) should charge a low price, regardless of what Nike chooses to do. B) should charge a high price, regardless of what Nike chooses to do. C) does not have a dominant strategy. D) should use the first-mover advantage and charge a low price. According to the figure shown, adidas:


A) should charge a low price, regardless of what Nike chooses to do.
B) should charge a high price, regardless of what Nike chooses to do.
C) does not have a dominant strategy.
D) should use the first-mover advantage and charge a low price.

E) B) and C)
F) A) and B)

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The prisoners' dilemma involves:only two players.any number of players.individual persons only.individuals or organizations.


A) I and IV
B) II and III
C) I and III
D) II and IV

E) B) and C)
F) C) and D)

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Which of the following statements is true about strategy in economic games?


A) There is only one strategy associated with each outcome.
B) There could be several strategies that can achieve the same goal.
C) All strategies followed in one particular game should be similar in order to be successful.
D) If one person's strategy is wildly different from others' strategies, that person will either come in first or last.

E) B) and C)
F) A) and B)

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Which of the following statements is true regarding collusion?


A) It can only occur when no dominant strategy is present.
B) It is a cooperative outcome between competitors.
C) Economists cannot theoretically model it.
D) It is a theoretical concept that is rarely observed.

E) A) and B)
F) A) and D)

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The study of how people behave strategically under different circumstances is called:


A) game theory.
B) game strategy.
C) strategy optimization.
D) strategy theory.

E) All of the above
F) B) and C)

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When competing firms have a commitment strategy, it is called:


A) collusion.
B) competitive cooperation.
C) predatory pricing.
D) competition.

E) A) and C)
F) C) and D)

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The players in a prisoner's dilemma:


A) would be much better off if they could cooperate.
B) have an incentive to never cooperate.
C) have a dominant strategy to never cooperate.
D) All of these statements are true.

E) A) and B)
F) A) and C)

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In a prisoner's dilemma:players have no regrets, given what the other players have chosen.there must be a dominant strategy for all players.equilibrium will never be reached.


A) I and II only
B) III only
C) I, II, and III
D) None of these are correct.

E) A) and D)
F) B) and C)

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{MISSING IMAGE}According to the figure shown, Apple:


A) has a dominant strategy to charge a high price.
B) does not have a dominant strategy.
C) will reach an optimum outcome by acting in its own self-interest.
D) has a dominant strategy to charge a low price.

E) A) and D)
F) None of the above

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Game theory is:


A) the study of how people behave strategically under different circumstances.
B) used by economists to evaluate behavior in a variety of settings.
C) a useful tool in predicting strategic behavior.
D) All of these statements are true.

E) B) and D)
F) B) and C)

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If the game in the figure shown results in a stable outcome, Nike will earn profits of: A) $2 million. B) $4 million. C) $10 million. D) $15 million. If the game in the figure shown results in a stable outcome, Nike will earn profits of:


A) $2 million.
B) $4 million.
C) $10 million.
D) $15 million.

E) None of the above
F) B) and C)

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What is the Nash Equilibrium of the game in the figure shown? A) Firm 1 and Firm 2 charge a high price. B) Firm 1 charges a high price and Firm 2 charges a low price. C) Firm 1 charges a low price and Firm 2 charges a high price. D) Firm 1 and Firm 2 charge a low price. What is the Nash Equilibrium of the game in the figure shown?


A) Firm 1 and Firm 2 charge a high price.
B) Firm 1 charges a high price and Firm 2 charges a low price.
C) Firm 1 charges a low price and Firm 2 charges a high price.
D) Firm 1 and Firm 2 charge a low price.

E) B) and D)
F) A) and B)

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Backward induction involves:


A) the process of analyzing a problem in reverse.
B) thinking forward and working backward.
C) starting with the last choice and working backward to determine an optimal strategy.
D) All of these statements are true.

E) B) and D)
F) A) and C)

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{MISSING IMAGE}According to the figure shown, Apple:


A) do not have stable equilibrium outcomes.
B) may have stable equilibrium outcomes.
C) always have stable equilibrium outcomes.
D) don't exist; all games have at least one dominant strategy.

E) All of the above
F) A) and C)

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The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. Both companies are trying to decide whether or not to invest in research and development. Tesla will make a decision first, and then Ford will make a decision after observing Tesla's choice. The payoffs are the profits (in millions) these companies will earn as a result of their choices.What profits can we predict Tesla will earn given the outcome of this game? A) $50 million B) $70 million C) $10 million D) $40 million The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. Both companies are trying to decide whether or not to invest in research and development. Tesla will make a decision first, and then Ford will make a decision after observing Tesla's choice. The payoffs are the profits (in millions) these companies will earn as a result of their choices.What profits can we predict Tesla will earn given the outcome of this game?


A) $50 million
B) $70 million
C) $10 million
D) $40 million

E) All of the above
F) A) and D)

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According to the figure shown, both players: A) will cooperate in an attempt to reach a stable equilibrium, but will not achieve it. B) will act in self-interest and achieve a stable, but less than optimum, equilibrium. C) will act in self-interest and achieve an optimum equilibrium that is stable. D) have an incentive to charge a low price and undercut the competition. According to the figure shown, both players:


A) will cooperate in an attempt to reach a stable equilibrium, but will not achieve it.
B) will act in self-interest and achieve a stable, but less than optimum, equilibrium.
C) will act in self-interest and achieve an optimum equilibrium that is stable.
D) have an incentive to charge a low price and undercut the competition.

E) None of the above
F) B) and D)

Correct Answer

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For a commitment strategy to work:


A) the punishment must be so bad that it outweighs the incentive to defect.
B) the punishment must occur immediately after the game is played.
C) both players must agree to a punishment.
D) no player may have a dominant strategy.

E) None of the above
F) C) and D)

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In the prisoner's dilemma:


A) a stable outcome is impossible.
B) strategy does not affect the outcome.
C) a stable outcome is possible.
D) a commitment strategy is needed to reach a stable outcome.

E) All of the above
F) A) and B)

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The figure shown represents the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to compete at these prices. The Rock Shop is trying to decide whether or not it should enter the market.According to the figure: A) The Rock Shop has a dominant strategy, but MiiTunes does not. B) MiiTunes has a dominant strategy, but The Rock Shop does not. C) neither store has a dominant strategy. D) both stores have a dominant strategy. The figure shown represents the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to compete at these prices. The Rock Shop is trying to decide whether or not it should enter the market.According to the figure:


A) The Rock Shop has a dominant strategy, but MiiTunes does not.
B) MiiTunes has a dominant strategy, but The Rock Shop does not.
C) neither store has a dominant strategy.
D) both stores have a dominant strategy.

E) B) and C)
F) A) and B)

Correct Answer

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Showing 21 - 40 of 155

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