Question 1

Given the following table, Tim's Treasures has a dominant strategy.

Accepted Answer

A) True 
 B)False

Question 2

Given the following table, Tim's Treasures can determine that maintaining price is a dominated strategy for Nancy's Nook and that Nancy's will not choose it. Since Nancy's will not choose it, Tim's strategy will be to discount.

Accepted Answer

A) True 
 B)False

Question 3

Backwards induction is the process of tracing backwards through a decision tree, starting from the best outcome for a given player, to determine that player's optimal strategy.

Accepted Answer

A) True 
 B)False

Question 4

Incentive contracting is designing agreements with incentives that harmonize the goal of the contracting parties.

Accepted Answer

A) True 
 B)False

Question 5

A collection company hires an independent software company to design software that will increase the efficiency of the workers. If the amount of money collected increases after the software is implemented, then the software company will be paid 4% of that increase. This is an example of incentive contracting.

Accepted Answer

A) True 
 B)False

Question 6

An iterative dominance strategy is one that is chosen by examining possible game outcomes and identifying dominated rival strategies.

Accepted Answer

A) True 
 B)False

Question 7

Given the following table, Nancy's Nook has a:

Accepted Answer

A)  dominant strategy which is to discount 
B)  dominant strategy which is to maintain 
C)  dominated strategy which is to discount 
D)  dominated strategy which is to maintain 
E)  both b and c 
A)  dominant strategy which is to discount 
B)  dominant strategy which is to maintain 
C)  dominated strategy which is to discount 
D)  dominated strategy which is to maintain 
E)  both b and c

Question 8

A repeated game with either a known or an uncertain end period is an):

Accepted Answer

A)  game tree 
B)  finitely repeated game 
C)  one shot game 
D)  infinitely repeated game 
E)  none of the above 
A)  game tree 
B)  finitely repeated game 
C)  one shot game 
D)  infinitely repeated game 
E)  none of the above

Question 9

Backwards induction is starting with the best payoffs to each player and tracing backwards along the branches to determine which decisions will be made.

Accepted Answer

A) True 
 B)False

Question 10

A strategy that is chosen by examining possible game outcomes and identifying dominated rival strategies is:

Accepted Answer

A)  dominated strategy 
B)  dominant strategy 
C)  nash strategy 
D)  iterative dominance strategy 
E)  first mover strategy 
A)  dominated strategy 
B)  dominant strategy 
C)  nash strategy 
D)  iterative dominance strategy 
E)  first mover strategy

Question 11

Search costs are only those direct expenditures incurred by individuals and/or firms associated with analyzing and making a decision to engage in a transaction.

Accepted Answer

A) True 
 B)False

Question 12

A rational person would spend the same amount of time searching for a low price on a new car as they would for a low price on a new car stereo.

Accepted Answer

A) True 
 B)False

Question 13

A strategy is an idea that encompasses all the different paths a firm may take without a specific decision being made.

Accepted Answer

A) True 
 B)False

Question 14

A first mover advantage:

Accepted Answer

A)  is a beneficial outcome that accrues to the player who exercises the first strategic choice in a sequential game 
B)  is a beneficial outcome that accrues to the player waits for the other to move first and gains the advantage of seeing the other companies mistakes 
C)  is a beneficial outcome that accrues to the player who exercises the first strategic choice in a simultaneous game 
D)  only occurs when there is 1 Nash equilibrium 
E)  none of the above 
A)  is a beneficial outcome that accrues to the player who exercises the first strategic choice in a sequential game 
B)  is a beneficial outcome that accrues to the player waits for the other to move first and gains the advantage of seeing the other companies mistakes 
C)  is a beneficial outcome that accrues to the player who exercises the first strategic choice in a simultaneous game 
D)  only occurs when there is 1 Nash equilibrium 
E)  none of the above

Question 15

Private information is relevant information known by the party on one side of the transaction that is not observable by the party on the other side.

Accepted Answer

A) True 
 B)False

Question 16

Given the following table, Tim's Treasures has a:

Accepted Answer

A)  dominant strategy which is to discount 
B)  dominant strategy which is to maintain 
C)  dominated strategy which is to discount 
D)  dominated strategy which is to maintain 
E)  none of the above 
A)  dominant strategy which is to discount 
B)  dominant strategy which is to maintain 
C)  dominated strategy which is to discount 
D)  dominated strategy which is to maintain 
E)  none of the above

Question 17

A game tree is a diagram that maps out a game using decision nodes and branches.

Accepted Answer

A) True 
 B)False

Question 18

A dominant strategy is one that is best for the player no matter the choice exercised by the player's rival.

Accepted Answer

A) True 
 B)False

Question 19

Moral hazard is an incentive for a party to a transaction to engage in risky or undesirable behavior because the transaction protects that same party against loss.

Accepted Answer

A) True 
 B)False

Question 20

Given the following tables, Nancy's Nook has a dominated strategy.

Accepted Answer

A) True 
 B)False

Given the following table, Tim's Treasures has a dominant strategy.

Given the following table, Tim's Treasures can determine that maintaining price is a dominated strategy for Nancy's Nook and that Nancy's will not choose it. Since Nancy's will not choose it, Tim's strategy will be to discount.

Backwards induction is the process of tracing backwards through a decision tree, starting from the best outcome for a given player, to determine that player's optimal strategy.

Incentive contracting is designing agreements with incentives that harmonize the goal of the contracting parties.

An iterative dominance strategy is one that is chosen by examining possible game outcomes and identifying dominated rival strategies.

Given the following table, Nancy's Nook has a:

A repeated game with either a known or an uncertain end period is an):

Backwards induction is starting with the best payoffs to each player and tracing backwards along the branches to determine which decisions will be made.

A strategy that is chosen by examining possible game outcomes and identifying dominated rival strategies is:

Search costs are only those direct expenditures incurred by individuals and/or firms associated with analyzing and making a decision to engage in a transaction.

A rational person would spend the same amount of time searching for a low price on a new car as they would for a low price on a new car stereo.

A strategy is an idea that encompasses all the different paths a firm may take without a specific decision being made.

A first mover advantage:

Private information is relevant information known by the party on one side of the transaction that is not observable by the party on the other side.

Given the following table, Tim's Treasures has a:

A game tree is a diagram that maps out a game using decision nodes and branches.

A dominant strategy is one that is best for the player no matter the choice exercised by the player's rival.

Moral hazard is an incentive for a party to a transaction to engage in risky or undesirable behavior because the transaction protects that same party against loss.

Given the following tables, Nancy's Nook has a dominated strategy.

Introduction, Basic Principles, and Methodology

Revenue of the Firm

Topics in Demand Analysis and Estimation

Economic Forecasting

Production Analysis

Cost of Production

Profit Analysis of the Firm

Perfect Competition and Monopoly

Monopolistic Competition and Oligopoly

Topics in Pricing and Profit Analysis

Factor Markets

Fundamentals of Project Evaluation

Risk in Project Analysis

Economics of Public Sector Decisions

Legal and Regulatory Environment of the Firm

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Exam 10: Games, Information and Strategy

Given the following table, Tim's Treasures has a dominant strategy.

Given the following table, Tim's Treasures can determine that maintaining price is a dominated strategy for Nancy's Nook and that Nancy's will not choose it. Since Nancy's will not choose it, Tim's strategy will be to discount.

Backwards induction is the process of tracing backwards through a decision tree, starting from the best outcome for a given player, to determine that player's optimal strategy.

Incentive contracting is designing agreements with incentives that harmonize the goal of the contracting parties.

An iterative dominance strategy is one that is chosen by examining possible game outcomes and identifying dominated rival strategies.

Given the following table, Nancy's Nook has a:

A repeated game with either a known or an uncertain end period is an):

Backwards induction is starting with the best payoffs to each player and tracing backwards along the branches to determine which decisions will be made.

A strategy that is chosen by examining possible game outcomes and identifying dominated rival strategies is:

Search costs are only those direct expenditures incurred by individuals and/or firms associated with analyzing and making a decision to engage in a transaction.

A rational person would spend the same amount of time searching for a low price on a new car as they would for a low price on a new car stereo.

A strategy is an idea that encompasses all the different paths a firm may take without a specific decision being made.

A first mover advantage:

Private information is relevant information known by the party on one side of the transaction that is not observable by the party on the other side.

Given the following table, Tim's Treasures has a:

A game tree is a diagram that maps out a game using decision nodes and branches.

A dominant strategy is one that is best for the player no matter the choice exercised by the player's rival.

Moral hazard is an incentive for a party to a transaction to engage in risky or undesirable behavior because the transaction protects that same party against loss.

Given the following tables, Nancy's Nook has a dominated strategy.

Introduction, Basic Principles, and Methodology

Revenue of the Firm

Topics in Demand Analysis and Estimation

Economic Forecasting

Production Analysis

Cost of Production

Profit Analysis of the Firm

Perfect Competition and Monopoly

Monopolistic Competition and Oligopoly

Topics in Pricing and Profit Analysis

Factor Markets

Fundamentals of Project Evaluation

Risk in Project Analysis

Economics of Public Sector Decisions

Legal and Regulatory Environment of the Firm

Filters