Question 1

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

Accepted Answer

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

Question 2

The prisoner's dilemma game can involve:

Accepted Answer

A)  only two players. 
B)  more than two players. 
C)  multiple organizations. 
D)  All of these statements are true. 
A)  only two players. 
B)  more than two players. 
C)  multiple organizations. 
D)  All of these statements are true.

Question 3

Games with a negative-negative outcome:

Accepted Answer

A)  must have a noncooperative equilibrium. 
B)  are not necessarily the best outcome for the players involved. 
C)  result from players acting in their own self-interest. 
D)  All of these statements are true. 
A)  must have a noncooperative equilibrium. 
B)  are not necessarily the best outcome for the players involved. 
C)  result from players acting in their own self-interest. 
D)  All of these statements are true.

Question 4

The stable outcome of the game in the figure shown will be:

Accepted Answer

A)  Nike charges a high price, and Adidas charges a low price. 
B)  Nike charges a low price, and Adidas charges a high price. 
C)  Nike and Adidas both charge a low price. 
D)  Nike and Adidas both charge a high price. 
A)  Nike charges a high price, and Adidas charges a low price. 
B)  Nike charges a low price, and Adidas charges a high price. 
C)  Nike and Adidas both charge a low price. 
D)  Nike and Adidas both charge a high price.

Question 5

If there is no single strategy that is best regardless of other players' behavior:

Accepted Answer

A)  there is no dominant strategy. 
B)  the dominant strategy will be to defect. 
C)  a noncooperative equilibrium is the only possible outcome. 
D)  the game is called a Prisoners' dilemma. 
A)  there is no dominant strategy. 
B)  the dominant strategy will be to defect. 
C)  a noncooperative equilibrium is the only possible outcome. 
D)  the game is called a Prisoners' dilemma.

Question 6

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses)they will earn.
According to the figure shown,if Starbucks expands in the market,then Dunkin Donuts should:

Accepted Answer

A)  also expand their business. 
B)  not expand. 
C)  give an ultimatum. 
D)  None of these statements is true. 
A)  also expand their business. 
B)  not expand. 
C)  give an ultimatum. 
D)  None of these statements is true.

Question 7

Explicit agreements between businesses to keep prices high:

Accepted Answer

A)  are illegal. 
B)  are called collusion. 
C)  are not in the public's best interests. 
D)  All of these statements are true. 
A)  are illegal. 
B)  are called collusion. 
C)  are not in the public's best interests. 
D)  All of these statements are true.

Question 8

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses)they will earn.
If the players in the figure shown act in their own self-interest,then we know that Dunkin Donuts will earn:

Accepted Answer

A)  $2 million. 
B)  $1 million. 
C)  $2 million 
D)  $0 million. 
A)  $2 million. 
B)  $1 million. 
C)  $2 million 
D)  $0 million.

Question 9

All games involve which of the following?

Accepted Answer

A)  Multiple players 
B)  Strategies 
C)  Payoffs 
D)  All games involve all of these things. 
A)  Multiple players 
B)  Strategies 
C)  Payoffs 
D)  All games involve all of these things.

Question 10

Games with a noncooperative equilibrium:

Accepted Answer

A)  always result in a negative-negative outcome. 
B)  always result in a positive-positive outcome. 
C)  can result in either a positive-positive or negative-negative outcome. 
D)  always result in a positive-negative outcome (zero-sum). 
A)  always result in a negative-negative outcome. 
B)  always result in a positive-positive outcome. 
C)  can result in either a positive-positive or negative-negative outcome. 
D)  always result in a positive-negative outcome (zero-sum).

Question 11

A way to summarize the actions and payoffs of a sequential game is to use a:

Accepted Answer

A)  decision matrix. 
B)  decision tree. 
C)  payoff tree. 
D)  flowchart. 
A)  decision matrix. 
B)  decision tree. 
C)  payoff tree. 
D)  flowchart.

Question 12

Game theory is:

Accepted Answer

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. 
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.

Question 13

This figure displays 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 make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
The game between music stores in the figure shows us that:

Accepted Answer

A)  only The Rock Shop has a dominant strategy, and so the outcome cannot be predicted. 
B)  only MiiTunes has a dominant strategy, and so the outcome cannot be predicted. 
C)  neither store has a dominant strategy, and so the outcome cannot be predicted. 
D)  None of these statements is true. 
A)  only The Rock Shop has a dominant strategy, and so the outcome cannot be predicted. 
B)  only MiiTunes has a dominant strategy, and so the outcome cannot be predicted. 
C)  neither store has a dominant strategy, and so the outcome cannot be predicted. 
D)  None of these statements is true.

Question 14

Economic games can be used to analyze decisions around which of the following situations?

Accepted Answer

A)  War 
B)  Business 
C)  Environmental protection 
D)  All of these situations. 
A)  War 
B)  Business 
C)  Environmental protection 
D)  All of these situations.

Question 15

When all players in a game choose the best strategy they can,given the choices of all other players,it is always a:

Accepted Answer

A)  Nash equilibrium. 
B)  positive-positive outcome. 
C)  cooperative equilibrium. 
D)  negative-negative equilibrium. 
A)  Nash equilibrium. 
B)  positive-positive outcome. 
C)  cooperative equilibrium. 
D)  negative-negative equilibrium.

Question 16

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade.They both will enjoy a higher grade when more effort is put into the project,but they also get pleasure from goofing off and not working on the project.The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
If the players in the figure shown act in their own self-interest,then we know that Sarah will earn utility of:

Accepted Answer

A)  6. 
B)  10. 
C)  7. 
D)  15. 
A)  6. 
B)  10. 
C)  7. 
D)  15.

Question 17

When one player has to make a decision before the other player,the situation is called a:

Accepted Answer

A)  commitment game. 
B)  simultaneous game. 
C)  sequential game. 
D)  prisoner's dilemma. 
A)  commitment game. 
B)  simultaneous game. 
C)  sequential game. 
D)  prisoner's dilemma.

Question 18

Behaving strategically:

Accepted Answer

A)  means recognizing that the actions of others will affect the trade-offs you face, and acting accordingly. 
B)  is an essential part of game theory. 
C)  involves rational decision making. 
D)  All of these statements are true. 
A)  means recognizing that the actions of others will affect the trade-offs you face, and acting accordingly. 
B)  is an essential part of game theory. 
C)  involves rational decision making. 
D)  All of these statements are true.

Question 19

Backward induction is a useful tool for:

Accepted Answer

A)  finding an optimal strategy in a sequential game. 
B)  analyzing the decisions in a prisoner's dilemma-type game. 
C)  finding an optimal strategy in a simultaneous game. 
D)  Backward induction is useful in any of these games. 
A)  finding an optimal strategy in a sequential game. 
B)  analyzing the decisions in a prisoner's dilemma-type game. 
C)  finding an optimal strategy in a simultaneous game. 
D)  Backward induction is useful in any of these games.

Question 20

When your outcomes depend on another's choices,asking __________________ is the key to good decision making.

Accepted Answer

A)  how will others respond 
B)  what the wants and constraints are of those involved 
C)  what the trade-offs are 
D)  why everyone isn't already doing it 
A)  how will others respond 
B)  what the wants and constraints are of those involved 
C)  what the trade-offs are 
D)  why everyone isn't already doing it

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

The prisoner's dilemma game can involve:

Games with a negative-negative outcome:

The stable outcome of the game in the figure shown will be:

If there is no single strategy that is best regardless of other players' behavior:

Explicit agreements between businesses to keep prices high:

All games involve which of the following?

Games with a noncooperative equilibrium:

A way to summarize the actions and payoffs of a sequential game is to use a:

Game theory is:

Economic games can be used to analyze decisions around which of the following situations?

When all players in a game choose the best strategy they can,given the choices of all other players,it is always a:

When one player has to make a decision before the other player,the situation is called a:

Behaving strategically:

Backward induction is a useful tool for:

When your outcomes depend on another's choices,asking __________________ is the key to good decision making.

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention Microeconomics

Consumer Behavior

Behavioral Economics: A Closer Look at Decision Making

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Factors of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

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Exam 9: Game Theory and Strategic Thinking

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

The prisoner's dilemma game can involve:

Games with a negative-negative outcome:

The stable outcome of the game in the figure shown will be:

If there is no single strategy that is best regardless of other players' behavior:

Explicit agreements between businesses to keep prices high:

All games involve which of the following?

Games with a noncooperative equilibrium:

A way to summarize the actions and payoffs of a sequential game is to use a:

Game theory is:

Economic games can be used to analyze decisions around which of the following situations?

When all players in a game choose the best strategy they can,given the choices of all other players,it is always a:

When one player has to make a decision before the other player,the situation is called a:

Behaving strategically:

Backward induction is a useful tool for:

When your outcomes depend on another's choices,asking __________________ is the key to good decision making.

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention Microeconomics

Consumer Behavior

Behavioral Economics: A Closer Look at Decision Making

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Factors of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Filters