Question 1

An ultimatum game is:

Accepted Answer

A)  one in which one player makes an offer and the other player has the simple choice of whether to accept or reject. 
B)  one in which one player makes an offer and the other player has the choice of whether to accept or offer a counteroffer. 
C)  a repeated sequential game. 
D)  the only game played by unions in reality. 
A)  one in which one player makes an offer and the other player has the simple choice of whether to accept or reject. 
B)  one in which one player makes an offer and the other player has the choice of whether to accept or offer a counteroffer. 
C)  a repeated sequential game. 
D)  the only game played by unions in reality.

Question 2

For players in a repeated-play game to achieve cooperation:

Accepted Answer

A)  the players must reach an explicit agreement to cooperate. 
B)  the players need not explicitly state an agreement to cooperate, but must publicly display a commitment strategy. 
C)  there is no need to enter into public commitment strategies or explicit agreements. 
D)  there is no need for players to collude. 
A)  the players must reach an explicit agreement to cooperate. 
B)  the players need not explicitly state an agreement to cooperate, but must publicly display a commitment strategy. 
C)  there is no need to enter into public commitment strategies or explicit agreements. 
D)  there is no need for players to collude.

Question 3

Collusion is a situation where businesses:

Accepted Answer

A)  agree to cooperate, and the U.S. government works hard to encourage this behavior. 
B)  have noncooperative outcomes, because they compete outside the public eye. 
C)  agree to cooperate, and their behavior does not serve the public interest. 
D)  act in their own self-interest and ignore what the other businesses are doing. 
A)  agree to cooperate, and the U.S. government works hard to encourage this behavior. 
B)  have noncooperative outcomes, because they compete outside the public eye. 
C)  agree to cooperate, and their behavior does not serve the public interest. 
D)  act in their own self-interest and ignore what the other businesses are doing.

Question 4

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 Joe puts forth high effort,then Sarah should:

Accepted Answer

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

Question 5

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,Joe:

Accepted Answer

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

Question 6

If each player responds by imitating the action of his opponent in the previous round of a repeating game,the players are following a:

Accepted Answer

A)  repeated cooperation agreement. 
B)  collusion plan. 
C)  commitment strategy. 
D)  tit-for-tat strategy. 
A)  repeated cooperation agreement. 
B)  collusion plan. 
C)  commitment strategy. 
D)  tit-for-tat strategy.

Question 7

The prisoner's dilemma game:

Accepted Answer

A)  is a zero sum game. 
B)  is a game of chance. 
C)  is a game with no dominant strategies. 
D)  is a game with a stable equilibrium. 
A)  is a zero sum game. 
B)  is a game of chance. 
C)  is a game with no dominant strategies. 
D)  is a game with a stable equilibrium.

Question 8

Repeated play can change the outcome in sequential games by:

Accepted Answer

A)  reducing the first-mover advantage. 
B)  removing the incentive to cooperate. 
C)  making collusion more probable. 
D)  increasing the incentive to defect. 
A)  reducing the first-mover advantage. 
B)  removing the incentive to cooperate. 
C)  making collusion more probable. 
D)  increasing the incentive to defect.

Question 9

The players of prisoner's dilemma-type games:

Accepted Answer

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. 
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.

Question 10

In the prisoner's dilemma game:

Accepted Answer

A)  a stable outcome is impossible. 
B)  only one player has a dominant strategy. 
C)  a stable outcome is possible. 
D)  a commitment strategy is needed to reach a stable outcome. 
A)  a stable outcome is impossible. 
B)  only one player has a dominant strategy. 
C)  a stable outcome is possible. 
D)  a commitment strategy is needed to reach a stable outcome.

Question 11

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.
If the two music stores are faced with the game in the figure,we can see that:

Accepted Answer

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. 
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.

Question 12

In games,the strategy to reach a particular goal:

Accepted Answer

A)  is the same for everyone. 
B)  can be different for different players and still achieve the same goal. 
C)  should be similar to what others have chosen to reach the same goal. 
D)  has begun to be documented by economists. 
A)  is the same for everyone. 
B)  can be different for different players and still achieve the same goal. 
C)  should be similar to what others have chosen to reach the same goal. 
D)  has begun to be documented by economists.

Question 13

Using a commitment strategy in:

Accepted Answer

A)  a simultaneous game can alter payoffs, but has no effect in sequential games. 
B)  a simultaneous game has no effect, but can alter the payoffs and outcome of sequential games. 
C)  either a simultaneous or sequential game has little impact on payoffs or outcome. 
D)  either a simultaneous or sequential game can greatly alter the payoffs and outcome of the game. 
A)  a simultaneous game can alter payoffs, but has no effect in sequential games. 
B)  a simultaneous game has no effect, but can alter the payoffs and outcome of sequential games. 
C)  either a simultaneous or sequential game has little impact on payoffs or outcome. 
D)  either a simultaneous or sequential game can greatly alter the payoffs and outcome of the game.

Question 14

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

Accepted Answer

A)  Starbucks will expand and Dunkin Donuts will not. 
B)  Starbucks will not expand and Dunkin Donuts will. 
C)  Starbucks and Dunkin Donuts will both expand. 
D)  neither Starbucks nor Dunkin Donuts will expand. 
A)  Starbucks will expand and Dunkin Donuts will not. 
B)  Starbucks will not expand and Dunkin Donuts will. 
C)  Starbucks and Dunkin Donuts will both expand. 
D)  neither Starbucks nor Dunkin Donuts will expand.

Question 15

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.
The game in the figure is shown using a:

Accepted Answer

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

Question 16

Collusion:

Accepted Answer

A)  rarely occurs in reality. 
B)  never occurs in reality. 
C)  has not occurred in the last hundred years or so, due to government policy outlawing it. 
D)  is a common problem in reality. 
A)  rarely occurs in reality. 
B)  never occurs in reality. 
C)  has not occurred in the last hundred years or so, due to government policy outlawing it. 
D)  is a common problem in reality.

Question 17

A commitment strategy is an agreement in which players agree to:

Accepted Answer

A)  submit to a penalty in the future if they defect from a given strategy. 
B)  cooperate before the game begins. 
C)  cooperate in repeated games until someone defects. 
D)  None of these is a definition of a commitment strategy. 
A)  submit to a penalty in the future if they defect from a given strategy. 
B)  cooperate before the game begins. 
C)  cooperate in repeated games until someone defects. 
D)  None of these is a definition of a commitment strategy.

Question 18

To economists,a game is:

Accepted Answer

A)  any situation in which players pursue strategies designed to achieve their goals. 
B)  a trivial pursuit that should not be used to analyze the economy or its actors. 
C)  a way to simplify and minimize the true importance of situations like war. 
D)  All of these statements are true. 
A)  any situation in which players pursue strategies designed to achieve their goals. 
B)  a trivial pursuit that should not be used to analyze the economy or its actors. 
C)  a way to simplify and minimize the true importance of situations like war. 
D)  All of these statements are true.

Question 19

The outcome of the game in the figure show predicts that Nike will earn profits of:

Accepted Answer

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

Question 20

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 Dunkin Donuts expands,then Starbucks 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.

An ultimatum game is:

For players in a repeated-play game to achieve cooperation:

Collusion is a situation where businesses:

If each player responds by imitating the action of his opponent in the previous round of a repeating game,the players are following a:

The prisoner's dilemma game:

Repeated play can change the outcome in sequential games by:

The players of prisoner's dilemma-type games:

In the prisoner's dilemma game:

In games,the strategy to reach a particular goal:

Using a commitment strategy in:

Collusion:

A commitment strategy is an agreement in which players agree to:

To economists,a game is:

The outcome of the game in the figure show predicts that Nike will earn profits of:

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

Exam 9: Game Theory and Strategic Thinking

An ultimatum game is:

For players in a repeated-play game to achieve cooperation:

Collusion is a situation where businesses:

If each player responds by imitating the action of his opponent in the previous round of a repeating game,the players are following a:

The prisoner's dilemma game:

Repeated play can change the outcome in sequential games by:

The players of prisoner's dilemma-type games:

In the prisoner's dilemma game:

In games,the strategy to reach a particular goal:

Using a commitment strategy in:

Collusion:

A commitment strategy is an agreement in which players agree to:

To economists,a game is:

The outcome of the game in the figure show predicts that Nike will earn profits of:

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