Question 1

An example of a real-life rule that might constrain people's behavior is:

Accepted Answer

A)  minimum wage legislation. 
B)  having 24 hours in a day. 
C)  the earth's limited supply of oil. 
D)  All of these are examples of real-life rules. 
A)  minimum wage legislation. 
B)  having 24 hours in a day. 
C)  the earth's limited supply of oil. 
D)  All of these are examples of real-life rules.

Question 2

In repeated games:

Accepted Answer

A)  a noncooperative outcome is more likely than in a single-round game. 
B)  cooperation never happens. 
C)  a cooperative outcome is more likely than in a single-round game. 
D)  players always cooperate and enjoy a mutually beneficial equilibrium. 
A)  a noncooperative outcome is more likely than in a single-round game. 
B)  cooperation never happens. 
C)  a cooperative outcome is more likely than in a single-round game. 
D)  players always cooperate and enjoy a mutually beneficial equilibrium.

Question 3

According to the figure shown,Nike:

Accepted Answer

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. 
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.

Question 4

For a commitment strategy to work:

Accepted Answer

A)  the punishment must be so bad that it outweighs the incentive to defect in the game. 
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. 
A)  the punishment must be so bad that it outweighs the incentive to defect in the game. 
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.

Question 5

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.
According to the figure,if MiiTunes charges low prices,The Rock Shop should:

Accepted Answer

A)  enter the market and earn $4 million. 
B)  enter the market and lose $2 million. 
C)  not enter the market and earn $0. 
D)  It cannot be determined what The Rock Shop will do. 
A)  enter the market and earn $4 million. 
B)  enter the market and lose $2 million. 
C)  not enter the market and earn $0. 
D)  It cannot be determined what The Rock Shop will do.

Question 6

Economists call a game that is played more than once:

Accepted Answer

A)  a repeated game. 
B)  collusion. 
C)  a commitment strategy. 
D)  cooperative price play. 
A)  a repeated game. 
B)  collusion. 
C)  a commitment strategy. 
D)  cooperative price play.

Question 7

In game theory,an example of a payoff could be:

Accepted Answer

A)  being the first mover in a game. 
B)  sharing information with a select few that others aren't privy to. 
C)  monetary gains made by a player. 
D)  giving an advantage to only one player. 
A)  being the first mover in a game. 
B)  sharing information with a select few that others aren't privy to. 
C)  monetary gains made by a player. 
D)  giving an advantage to only one player.

Question 8

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.
Given the dominant strategy of MiiTunes according to the figure,we can predict that The Rock Shop:

Accepted Answer

A)  will enter and enjoy profits of $4 million. 
B)  will enter and lose $2 million. 
C)  will not enter and earn $0. 
D)  Their actions cannot be predicted because they do not have a dominant strategy. 
A)  will enter and enjoy profits of $4 million. 
B)  will enter and lose $2 million. 
C)  will not enter and earn $0. 
D)  Their actions cannot be predicted because they do not have a dominant strategy.

Question 9

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.
According to the figure,if The Rock Shop enters the market,MiiTunes should:

Accepted Answer

A)  charge a high price. 
B)  charge a low price. 
C)  leave the market. 
D)  give an ultimatum to The Rock Shop. 
A)  charge a high price. 
B)  charge a low price. 
C)  leave the market. 
D)  give an ultimatum to The Rock Shop.

Question 10

Games:

Accepted Answer

A)  only have one outcome possible. 
B)  with noncooperative equilibriums are always negative-negative outcomes. 
C)  may have several stable outcomes. 
D)  must have a dominant strategy present to reach a stable equilibrium. 
A)  only have one outcome possible. 
B)  with noncooperative equilibriums are always negative-negative outcomes. 
C)  may have several stable outcomes. 
D)  must have a dominant strategy present to reach a stable equilibrium.

Question 11

Game theory is:

Accepted Answer

A)  the study of how people behave strategically under different circumstances. 
B)  used to predict the winners of only certain types of strategic games. 
C)  used to evaluate the microeconomic choices that involve probabilities of different outcomes. 
D)  the study of games of chance like solitaire or betting on horse races. 
A)  the study of how people behave strategically under different circumstances. 
B)  used to predict the winners of only certain types of strategic games. 
C)  used to evaluate the microeconomic choices that involve probabilities of different outcomes. 
D)  the study of games of chance like solitaire or betting on horse races.

Question 12

Cooperative equilibriums:

Accepted Answer

A)  are impossible to reach in real life. 
B)  never occur unless players act in their own self-interest. 
C)  never result in positive-positive outcomes. 
D)  can arise if a game is repeated. 
A)  are impossible to reach in real life. 
B)  never occur unless players act in their own self-interest. 
C)  never result in positive-positive outcomes. 
D)  can arise if a game is repeated.

Question 13

An example of a payoff in a game would be:

Accepted Answer

A)  a salary. 
B)  winning an election. 
C)  having clean drinking water. 
D)  All of these are examples of payoffs. 
A)  a salary. 
B)  winning an election. 
C)  having clean drinking water. 
D)  All of these are examples of payoffs.

Question 14

According to the figure shown,if Nike charges a high price,then Adidas should:

Accepted Answer

A)  charge a high price. 
B)  charge a low price. 
C)  leave the market. 
D)  give an ultimatum. 
A)  charge a high price. 
B)  charge a low price. 
C)  leave the market. 
D)  give an ultimatum.

Question 15

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.
According to the figure shown,if Sarah puts forth low effort,then Joe should:

Accepted Answer

A)  put forth high effort. 
B)  put forth low effort. 
C)  leave the market. 
D)  give an ultimatum. 
A)  put forth high effort. 
B)  put forth low effort. 
C)  leave the market. 
D)  give an ultimatum.

Question 16

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.
According to the figure,The Rock Shop:

Accepted Answer

A)  should enter the market, regardless of what MiiTunes chooses to do. 
B)  should not enter the market, regardless of what MiiTunes chooses to do. 
C)  does not have a dominant strategy. 
D)  has more than one dominant strategy. 
A)  should enter the market, regardless of what MiiTunes chooses to do. 
B)  should not enter the market, regardless of what MiiTunes chooses to do. 
C)  does not have a dominant strategy. 
D)  has more than one dominant strategy.

Question 17

All games involve which of the following?

Accepted Answer

A)  Rules 
B)  Chance events 
C)  Dice 
D)  Cards 
A)  Rules 
B)  Chance events 
C)  Dice 
D)  Cards

Question 18

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.
According to the figure shown:

Accepted Answer

A)  there is no stable equilibrium to the game. 
B)  both will act in their own self-interest and get a stable, but less than optimum, equilibrium. 
C)  both will act in their own self-interest and get an optimum equilibrium that is stable. 
D)  both have incentive to put forth high effort. 
A)  there is no stable equilibrium to the game. 
B)  both will act in their own self-interest and get a stable, but less than optimum, equilibrium. 
C)  both will act in their own self-interest and get an optimum equilibrium that is stable. 
D)  both have incentive to put forth high effort.

Question 19

While everyone wants a clean environment,it can be very hard to achieve.An approach governments could take to promote that outcome is to:

Accepted Answer

A)  create social norms. 
B)  create and enforce strict laws and heavy fines. 
C)  influence individual's incentives. 
D)  All of these are ways governments can get the "green" behavior they want. 
A)  create social norms. 
B)  create and enforce strict laws and heavy fines. 
C)  influence individual's incentives. 
D)  All of these are ways governments can get the "green" behavior they want.

Question 20

According to the figure shown,if Adidas charges a low price,then Nike should:

Accepted Answer

A)  charge a high price. 
B)  leave the market. 
C)  charge a low price. 
D)  give an ultimatum. 
A)  charge a high price. 
B)  leave the market. 
C)  charge a low price. 
D)  give an ultimatum.

An example of a real-life rule that might constrain people's behavior is:

In repeated games:

According to the figure shown,Nike:

For a commitment strategy to work:

Economists call a game that is played more than once:

In game theory,an example of a payoff could be:

Games:

Game theory is:

Cooperative equilibriums:

An example of a payoff in a game would be:

According to the figure shown,if Nike charges a high price,then Adidas should:

All games involve which of the following?

While everyone wants a clean environment,it can be very hard to achieve.An approach governments could take to promote that outcome is to:

According to the figure shown,if Adidas charges a low price,then Nike should:

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

An example of a real-life rule that might constrain people's behavior is:

In repeated games:

According to the figure shown,Nike:

For a commitment strategy to work:

Economists call a game that is played more than once:

In game theory,an example of a payoff could be:

Games:

Game theory is:

Cooperative equilibriums:

An example of a payoff in a game would be:

According to the figure shown,if Nike charges a high price,then Adidas should:

All games involve which of the following?

While everyone wants a clean environment,it can be very hard to achieve.An approach governments could take to promote that outcome is to:

According to the figure shown,if Adidas charges a low price,then Nike should:

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