Question 1

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.How many Nash equilibria are there?

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 4 
A) 0 
B) 1 
C) 2 
D) 4

Question 2

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.If the fixed cost of entry were to increase,which of the following would occur?

Accepted Answer

A) The incumbent chooses the Cournot level of output. 
B) The incumbent shuts down. 
C) The entry-deterring level of output rises. 
D) The entry-deterring level of output falls. 
A) The incumbent chooses the Cournot level of output. 
B) The incumbent shuts down. 
C) The entry-deterring level of output rises. 
D) The entry-deterring level of output falls.

Question 3

Fixed costs of entry create an advantage for potential entrants since incumbents have already made these expenditures while potential entrants can avoid these costs.

Accepted Answer

A) True 
 B)False

Question 4

In auctions,the winner always pays a price equal to the highest (his)bid.

Accepted Answer

A) True 
 B)False

Question 5

-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.

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.How many Nash equilibria are there?

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.If the fixed cost of entry were to increase,which of the following would occur?

Fixed costs of entry create an advantage for potential entrants since incumbents have already made these expenditures while potential entrants can avoid these costs.

In auctions,the winner always pays a price equal to the highest (his)bid.

-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?

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 13: Game Theory

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.How many Nash equilibria are there?

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.If the fixed cost of entry were to increase,which of the following would occur?

Fixed costs of entry create an advantage for potential entrants since incumbents have already made these expenditures while potential entrants can avoid these costs.

In auctions,the winner always pays a price equal to the highest (his)bid.

-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?

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters