Question 1

If each player in a game uses a strategy that results in a Nash equilibrium outcome,the players are most likely to say

Accepted Answer

A)  "I don't like my choice, because I think I could have done better." 
B)  "Given the strategies chosen by the other players in the game, I probably could have done better if I had more time." 
C)  "Given the strategies chosen by the other players in the game, I made the best possible choice." 
D)  "There was no real strategy on my part, I basically made an educated guess." 
A)  "I don't like my choice, because I think I could have done better." 
B)  "Given the strategies chosen by the other players in the game, I probably could have done better if I had more time." 
C)  "Given the strategies chosen by the other players in the game, I made the best possible choice." 
D)  "There was no real strategy on my part, I basically made an educated guess."

Question 2

Not all games with two or more Nash equilibria can be solved with pre-play communication because

Accepted Answer

A)  cheap talk may be illegal under anti-trust laws. 
B)  if there's an incentive for one or more players to lie, then cheap talk lacks credibility. 
C)  pareto criterion might not be defined. 
D)  Both A and B 
A)  cheap talk may be illegal under anti-trust laws. 
B)  if there's an incentive for one or more players to lie, then cheap talk lacks credibility. 
C)  pareto criterion might not be defined. 
D)  Both A and B

Question 3

If the managers of your firm have bounded rationality,then

Accepted Answer

A)  the firm should fire them and hire more competent managers. 
B)  a Nash equilibrium does not exist. 
C)  they are limited in their ability to calculate and may not succeed in maximizing profits. 
D)  it is not possible to maximize profits. 
A)  the firm should fire them and hire more competent managers. 
B)  a Nash equilibrium does not exist. 
C)  they are limited in their ability to calculate and may not succeed in maximizing profits. 
D)  it is not possible to maximize profits.

Question 4

If a firm does not know its rival's profit function,then we consider that information to be

Accepted Answer

A)  irrelevant in deciding its best strategy. 
B)  private. 
C)  common knowledge. 
D)  Pareto sub-optimal. 
A)  irrelevant in deciding its best strategy. 
B)  private. 
C)  common knowledge. 
D)  Pareto sub-optimal.

Question 5

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.Firm B's dominant strategy

Accepted Answer

A)  is to make basic computers. 
B)  is to make advanced computers. 
C)  is to adopt firm A's strategy. 
D)  does not exist in this game. 
A)  is to make basic computers. 
B)  is to make advanced computers. 
C)  is to adopt firm A's strategy. 
D)  does not exist in this game.

Question 6

In a static game,firms

Accepted Answer

A)  compete multiple times until there is a winner. 
B)  compete only once. 
C)  must have complete information. 
D)  act sequentially. 
A)  compete multiple times until there is a winner. 
B)  compete only once. 
C)  must have complete information. 
D)  act sequentially.

Question 7

In the above table,if the players use a maximum strategy

Accepted Answer

A)  firm A produces a High Quality product and firm B produces a Low Quality product. 
B)  the equilibrium choice is the same as using a regular, best response strategy. 
C)  both firms produce a High Quality product. 
D)  firm A produces a Low Quality product and firm B produces a High Quality product. 
A)  firm A produces a High Quality product and firm B produces a Low Quality product. 
B)  the equilibrium choice is the same as using a regular, best response strategy. 
C)  both firms produce a High Quality product. 
D)  firm A produces a Low Quality product and firm B produces a High Quality product.

Question 8

In the above table,if the players use a maximum strategy

Accepted Answer

A)  the equilibrium is for both firms to produce. 
B)  the equilibrium choice is the same as using a regular, best response strategy. 
C)  the equilibrium is for A to produce and B not to produce. 
D)  the equilibrium is for B to produce and A not to produce. 
A)  the equilibrium is for both firms to produce. 
B)  the equilibrium choice is the same as using a regular, best response strategy. 
C)  the equilibrium is for A to produce and B not to produce. 
D)  the equilibrium is for B to produce and A not to produce.

Question 9

In an English auction

Accepted Answer

A)  the price decreases until someone bids. 
B)  the price increases until nobody else will raise the bid. 
C)  bidders put their bids in a sealed envelope. 
D)  the winning bidder pays the amount bid by the person with the second highest bid. 
A)  the price decreases until someone bids. 
B)  the price increases until nobody else will raise the bid. 
C)  bidders put their bids in a sealed envelope. 
D)  the winning bidder pays the amount bid by the person with the second highest bid.

Question 10

Bargaining does NOT normally occur in

Accepted Answer

A)  vertical business relationships. 
B)  wages and working conditions under a union contract. 
C)  posted price markets. 
D)  the legal system. 
A)  vertical business relationships. 
B)  wages and working conditions under a union contract. 
C)  posted price markets. 
D)  the legal system.

Question 11

A game in economics is defined as

Accepted Answer

A)  something that is shown on ESPN. 
B)  competition in which strategic decision making is integral. 
C)  competition in general. 
D)  an actual strategy chosen by one or more economic agents. 
A)  something that is shown on ESPN. 
B)  competition in which strategic decision making is integral. 
C)  competition in general. 
D)  an actual strategy chosen by one or more economic agents.

Question 12

After analyzing his opponent,a tennis player decides to serve 10% of his serves to the left,50% of his serves to the right,and 40% of his serves at the body of his opponent.This illustrates a

Accepted Answer

A)  deterministic strategy. 
B)  a dominant strategy. 
C)  mixed strategy. 
D)  non-game theoretic problem. 
A)  deterministic strategy. 
B)  a dominant strategy. 
C)  mixed strategy. 
D)  non-game theoretic problem.

Question 13

One possible source of inefficiency in bargaining is

Accepted Answer

A)  that there are multiple Nash equilibria. 
B)  bounded irrationality. 
C)  that the Nash product may be indeterminant. 
D)  that the bargaining process takes time. 
A)  that there are multiple Nash equilibria. 
B)  bounded irrationality. 
C)  that the Nash product may be indeterminant. 
D)  that the bargaining process takes time.

Question 14

A single-period duopoly firm can choose output level A or B.The firm decides it will produce level A regardless of what the other firm produces.This decision may occur because

Accepted Answer

A)  producing the output level A is a dominant strategy. 
B)  this firm has simply decided to always produce at level A. 
C)  Both A and B are possible. 
D)  None of the above. 
A)  producing the output level A is a dominant strategy. 
B)  this firm has simply decided to always produce at level A. 
C)  Both A and B are possible. 
D)  None of the above.

Question 15

A Nash bargaining solution

Accepted Answer

A)  is not the same as a Nash equilibrium. 
B)  is derived from a Nash equilibrium. 
C)  gives a solution in both cooperative and non-cooperative games. 
D)  None of the above. 
A)  is not the same as a Nash equilibrium. 
B)  is derived from a Nash equilibrium. 
C)  gives a solution in both cooperative and non-cooperative games. 
D)  None of the above.

Question 16

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Accepted Answer

A)  Firm A does not have a dominant strategy. 
B)  Firm B does not have a dominant strategy. 
C)  Neither firm entering is a Nash equilibrium. 
D)  The outcome of the game is unpredictable. 
A)  Firm A does not have a dominant strategy. 
B)  Firm B does not have a dominant strategy. 
C)  Neither firm entering is a Nash equilibrium. 
D)  The outcome of the game is unpredictable.

Question 17

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Accepted Answer

A)  Only firm A will enter the market. 
B)  Only firm B will enter the market. 
C)  Neither firm entering is a Nash equilibrium. 
D)  The outcome of the game is unpredictable. 
A)  Only firm A will enter the market. 
B)  Only firm B will enter the market. 
C)  Neither firm entering is a Nash equilibrium. 
D)  The outcome of the game is unpredictable.

Question 18

Which of the following statements is TRUE?

Accepted Answer

A)  If a game has one or more Nash equilibria, then it's not really a game since the solution is known. 
B)  A game can either have a Nash equilibrium or a dominant strategy solution. 
C)  If a game has a Nash equilibrium, the game must have a dominant strategy solution. 
D)  If a game has a dominant strategy solution, the solution must also be a Nash equilibrium. 
A)  If a game has one or more Nash equilibria, then it's not really a game since the solution is known. 
B)  A game can either have a Nash equilibrium or a dominant strategy solution. 
C)  If a game has a Nash equilibrium, the game must have a dominant strategy solution. 
D)  If a game has a dominant strategy solution, the solution must also be a Nash equilibrium.

Question 19

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Accepted Answer

A)  Since firm B has no dominant strategy, its decision is unpredictable. 
B)  Since firm B's decision is unpredictable, firm A's decision is unpredictable. 
C)  Neither firm entering is a Nash equilibrium. 
D)  Firm B will not enter because it knows firm A will. 
A)  Since firm B has no dominant strategy, its decision is unpredictable. 
B)  Since firm B's decision is unpredictable, firm A's decision is unpredictable. 
C)  Neither firm entering is a Nash equilibrium. 
D)  Firm B will not enter because it knows firm A will.

Question 20

A Nash equilibrium occurs when

Accepted Answer

A)  players choose their best strategy given the strategies chosen by others. 
B)  the efficient allocation of resources is achieved by setting marginal revenue equal to marginal cost. 
C)  a monopolist is forced to produce the efficient level of output. 
D)  oligopolists cooperate with each other. 
A)  players choose their best strategy given the strategies chosen by others. 
B)  the efficient allocation of resources is achieved by setting marginal revenue equal to marginal cost. 
C)  a monopolist is forced to produce the efficient level of output. 
D)  oligopolists cooperate with each other.

If each player in a game uses a strategy that results in a Nash equilibrium outcome,the players are most likely to say

Not all games with two or more Nash equilibria can be solved with pre-play communication because

If the managers of your firm have bounded rationality,then

If a firm does not know its rival's profit function,then we consider that information to be

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.Firm B's dominant strategy

In a static game,firms

In the above table,if the players use a maximum strategy

In the above table,if the players use a maximum strategy

In an English auction

Bargaining does NOT normally occur in

A game in economics is defined as

After analyzing his opponent,a tennis player decides to serve 10% of his serves to the left,50% of his serves to the right,and 40% of his serves at the body of his opponent.This illustrates a

One possible source of inefficiency in bargaining is

A single-period duopoly firm can choose output level A or B.The firm decides it will produce level A regardless of what the other firm produces.This decision may occur because

A Nash bargaining solution

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Which of the following statements is TRUE?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

A Nash equilibrium occurs when

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 12: Game Theory and Business Strategy

If each player in a game uses a strategy that results in a Nash equilibrium outcome,the players are most likely to say

Not all games with two or more Nash equilibria can be solved with pre-play communication because

If the managers of your firm have bounded rationality,then

If a firm does not know its rival's profit function,then we consider that information to be

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.Firm B's dominant strategy

In a static game,firms

In the above table,if the players use a maximum strategy

In the above table,if the players use a maximum strategy

In an English auction

Bargaining does NOT normally occur in

A game in economics is defined as

After analyzing his opponent,a tennis player decides to serve 10% of his serves to the left,50% of his serves to the right,and 40% of his serves at the body of his opponent.This illustrates a

One possible source of inefficiency in bargaining is

A single-period duopoly firm can choose output level A or B.The firm decides it will produce level A regardless of what the other firm produces.This decision may occur because

A Nash bargaining solution

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Which of the following statements is TRUE?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

A Nash equilibrium occurs when

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters