Question 1

Refer to Figure d,which illustrates a game played by Travis and Darren.For Travis,North is:

Accepted Answer

A)  the best response. 
B)  the dominant strategy. 
C)  weakly dominated. 
D)  dominated. 
A)  the best response. 
B)  the dominant strategy. 
C)  weakly dominated. 
D)  dominated. D

Question 2

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

Accepted Answer

A)  If James chooses Up, Theodore's best response is to choose Right. 
B)  If James chooses Down, Theodore's best response is to choose Left. 
C)  If Theodore chooses Left, James's best response is to choose Up. 
D)  If Theodore chooses Right, James's best response is to choose Up. 
A)  If James chooses Up, Theodore's best response is to choose Right. 
B)  If James chooses Down, Theodore's best response is to choose Left. 
C)  If Theodore chooses Left, James's best response is to choose Up. 
D)  If Theodore chooses Right, James's best response is to choose Up. C

Question 3

A second-price auction:

Accepted Answer

A)  has two Nash equilibriums. 
B)  does not have a Nash equilibrium. 
C)  leads to a winner's curse. 
D)  avoids the winner's curse. 
A)  has two Nash equilibriums. 
B)  does not have a Nash equilibrium. 
C)  leads to a winner's curse. 
D)  avoids the winner's curse. D

Question 4

Playing the equilibrium of a one-stage game over and over again when the one-stage game is repeated is:

Accepted Answer

A)  always a Nash equilibrium. 
B)  dominated in some cases. 
C)  weakly dominated in some cases. 
D)  a mixed-strategy equilibrium. 
A)  always a Nash equilibrium. 
B)  dominated in some cases. 
C)  weakly dominated in some cases. 
D)  a mixed-strategy equilibrium.

Question 5

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

Accepted Answer

A)  If James chooses Up, Theodore's best response is to choose Left. 
B)  If James chooses Down, Theodore's best response is to choose Left. 
C)  If Theodore chooses Left, James's best response is to choose Down. 
D)  If Theodore chooses Right, James's best response is to choose Up. 
A)  If James chooses Up, Theodore's best response is to choose Left. 
B)  If James chooses Down, Theodore's best response is to choose Left. 
C)  If Theodore chooses Left, James's best response is to choose Down. 
D)  If Theodore chooses Right, James's best response is to choose Up.

Question 6

Refer to the game between James and Theodore depicted in Figure 12.1.Who has a dominant strategy?

Accepted Answer

A)  Only James 
B)  Only Theodore 
C)  Both James and Theodore 
D)  Neither James nor Theodore 
A)  Only James 
B)  Only Theodore 
C)  Both James and Theodore 
D)  Neither James nor Theodore

Question 7

Refer to Figure a.Charlie and Joe both want to ride shotgun with their mother,so they play a game of rock-paper-scissors to determine who gets to sit in the front seat.In the table,-1 represents a loss,1 a win and 0 a tie,and Joe's payoff is shown in the upper left-hand corner of each cell,while Charlie's appears in the lower right-hand corner.If Charlie knows Joe always throws scissors,what is Charlie's best response?

Accepted Answer

A)  Rock 
B)  Paper 
C)  Scissors 
D)  The answer cannot be determined from the information given. 
A)  Rock 
B)  Paper 
C)  Scissors 
D)  The answer cannot be determined from the information given.

Question 8

Refer to Figure b.Kate and Alice are sisters with a very strict mother.The girls are not allowed to watch television during the day when their mother is at work.The mother comes home one day and knows at least one girl was watching the television because it is warm.She sends the girls to their separate bedrooms while she decides what to do.After giving it some thought,she decides to send a message to the naughty girls and offers them the following deal: if they both deny watching TV,they will each be grounded for 3 weeks; if one squeals on the other,but the other denies watching TV,the squealer is grounded for 2 weeks,while the denier is grounded for 10; if they both squeal,each is grounded for 6 weeks.The following payoff matrix illustrates the girls' dilemma,with Kate's payoff shown in the upper left-hand corner of each cell and Alice's in the lower right-hand corner.What is Alice's dominant strategy?

Accepted Answer

A)  Squeal 
B)  Deny 
C)  Alice does not have a dominant strategy. 
D)  Alice's dominant strategy depends upon what Kate does. 
A)  Squeal 
B)  Deny 
C)  Alice does not have a dominant strategy. 
D)  Alice's dominant strategy depends upon what Kate does.

Question 9

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

Accepted Answer

A)  If James chooses Up, Theodore's best response is to choose Left. 
B)  If James chooses Down, Theodore's best response is to choose Right. 
C)  If Theodore chooses Left, James's best response is to choose Up. 
D)  If Theodore chooses Right, James's best response is to choose Down. 
A)  If James chooses Up, Theodore's best response is to choose Left. 
B)  If James chooses Down, Theodore's best response is to choose Right. 
C)  If Theodore chooses Left, James's best response is to choose Up. 
D)  If Theodore chooses Right, James's best response is to choose Down.

Question 10

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.If Brandon watches the Red Sox,what is Allie's best response?

Accepted Answer

A)  Allie should watch the Red Sox. 
B)  Allie should watch the Mets. 
C)  It does not matter which Allie watches; she is indifferent between the Red Sox and the Mets. 
D)  Allie should not consider Brandon's choice when making her decision. 
A)  Allie should watch the Red Sox. 
B)  Allie should watch the Mets. 
C)  It does not matter which Allie watches; she is indifferent between the Red Sox and the Mets. 
D)  Allie should not consider Brandon's choice when making her decision.

Question 11

A strategy is dominant if:

Accepted Answer

A)  it is one of several best responses for a player, regardless of other players' choices. 
B)  it is a player's only best response, given a particular choice of the other players. 
C)  it is independent of other players' choices. 
D)  it is a player's only best response, regardless of other players' choices. 
A)  it is one of several best responses for a player, regardless of other players' choices. 
B)  it is a player's only best response, given a particular choice of the other players. 
C)  it is independent of other players' choices. 
D)  it is a player's only best response, regardless of other players' choices.

Question 12

A self-enforcing agreement:

Accepted Answer

A)  describes an agreement in which every party involved has an incentive to abide by it, assuming that others do the same. 
B)  requires a contract. 
C)  describes the strategy that makes up a Nash equilibrium. 
D)  describes the strategy that makes up a Nash equilibrium and describes an agreement in which every party involved has an incentive to abide by it, assuming that others do the same. 
A)  describes an agreement in which every party involved has an incentive to abide by it, assuming that others do the same. 
B)  requires a contract. 
C)  describes the strategy that makes up a Nash equilibrium. 
D)  describes the strategy that makes up a Nash equilibrium and describes an agreement in which every party involved has an incentive to abide by it, assuming that others do the same.

Question 13

Refer to Figure d,which illustrates a game played by Travis and Darren.Travis's dominant strategy is:

Accepted Answer

A)  North. 
B)  South. 
C)  East. 
D)  West. 
A)  North. 
B)  South. 
C)  East. 
D)  West.

Question 14

The winner's curse is the tendency in certain types of auctions for:

Accepted Answer

A)  unsophisticated bidders to overpay whenever they win. 
B)  winners to be unable to win a subsequent auction. 
C)  winners to regret spending their money on the auctioned item. 
D)  the owner of the item up for auction to unfairly drive up auction prices. 
A)  unsophisticated bidders to overpay whenever they win. 
B)  winners to be unable to win a subsequent auction. 
C)  winners to regret spending their money on the auctioned item. 
D)  the owner of the item up for auction to unfairly drive up auction prices.

Question 15

Free riding:

Accepted Answer

A)  cannot occur if strategizing takes place. 
B)  is reflected by a downward-sloping best response function. 
C)  is reflected by an upward-sloping best response function. 
D)  is no player's best response. 
A)  cannot occur if strategizing takes place. 
B)  is reflected by a downward-sloping best response function. 
C)  is reflected by an upward-sloping best response function. 
D)  is no player's best response.

Question 16

Refer to Figure 12.1.What is the Nash equilibrium?

Accepted Answer

A)  James chooses Up, Theodore chooses Left 
B)  James chooses Up, Theodore chooses Right 
C)  James chooses Down, Theodore chooses Left 
D)  James chooses Down, Theodore chooses Right 
A)  James chooses Up, Theodore chooses Left 
B)  James chooses Up, Theodore chooses Right 
C)  James chooses Down, Theodore chooses Left 
D)  James chooses Down, Theodore chooses Right

Question 17

Cooperation in an infinite game

Accepted Answer

A)  is impossible. 
B)  is possible if grim strategies are used. 
C)  is guaranteed. 
D)  is possible if no one cares about the future. 
A)  is impossible. 
B)  is possible if grim strategies are used. 
C)  is guaranteed. 
D)  is possible if no one cares about the future.

Question 18

John Nash shared the Nobel Prize in Economics with:

Accepted Answer

A)  John Harsanyi and Reinhard Selton. 
B)  Reinhard Selton. 
C)  Robert Auman and Reinhard Selton. 
D)  Milton Friedman. 
A)  John Harsanyi and Reinhard Selton. 
B)  Reinhard Selton. 
C)  Robert Auman and Reinhard Selton. 
D)  Milton Friedman.

Question 19

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

Accepted Answer

A)  If James chooses Up, Theodore's best response is to choose Right. 
B)  If James chooses Down, Theodore's best response is to choose Right. 
C)  If Theodore chooses Left, James's best response is to choose Up. 
D)  If Theodore chooses Right, James's best response is to choose Up. 
A)  If James chooses Up, Theodore's best response is to choose Right. 
B)  If James chooses Down, Theodore's best response is to choose Right. 
C)  If Theodore chooses Left, James's best response is to choose Up. 
D)  If Theodore chooses Right, James's best response is to choose Up.

Question 20

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.If Allie watches the Red Sox,what is Brandon's best response?

Accepted Answer

A)  Brandon should watch the Red Sox. 
B)  Brandon should watch the Mets. 
C)  It does not matter which Brandon watches; he is indifferent between the Red Sox and the Mets. 
D)  Brandon should not consider Allie's choice when making her decision. 
A)  Brandon should watch the Red Sox. 
B)  Brandon should watch the Mets. 
C)  It does not matter which Brandon watches; he is indifferent between the Red Sox and the Mets. 
D)  Brandon should not consider Allie's choice when making her decision.

Refer to Figure d,which illustrates a game played by Travis and Darren.For Travis,North is:

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

A second-price auction:

Playing the equilibrium of a one-stage game over and over again when the one-stage game is repeated is:

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

Refer to the game between James and Theodore depicted in Figure 12.1.Who has a dominant strategy?

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A strategy is dominant if:

A self-enforcing agreement:

Refer to Figure d,which illustrates a game played by Travis and Darren.Travis's dominant strategy is:

The winner's curse is the tendency in certain types of auctions for:

Free riding:

Refer to Figure 12.1.What is the Nash equilibrium?

Cooperation in an infinite game

John Nash shared the Nobel Prize in Economics with:

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

Introduction

Supply and Demand

Balancing Benefits and Costs

Consumer Preferences

Constraints, Choices, and Demand

Demand and Welfare

Technology and Production

Cost

Profit Maximization

Choices Involving Time

Choices Involving Risk

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Asymmetric Information

Filters

Exam 12: Choices Involving Strategy

Refer to Figure d,which illustrates a game played by Travis and Darren.For Travis,North is:

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

A second-price auction:

Playing the equilibrium of a one-stage game over and over again when the one-stage game is repeated is:

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

Refer to the game between James and Theodore depicted in Figure 12.1.Who has a dominant strategy?

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A strategy is dominant if:

A self-enforcing agreement:

Refer to Figure d,which illustrates a game played by Travis and Darren.Travis's dominant strategy is:

The winner's curse is the tendency in certain types of auctions for:

Free riding:

Refer to Figure 12.1.What is the Nash equilibrium?

Cooperation in an infinite game

John Nash shared the Nobel Prize in Economics with:

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

Introduction

Supply and Demand

Balancing Benefits and Costs

Consumer Preferences

Constraints, Choices, and Demand

Demand and Welfare

Technology and Production

Cost

Profit Maximization

Choices Involving Time

Choices Involving Risk

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Asymmetric Information

Filters