Exam 14: Game Theory and the Economics of Information

Use the following table to answer the question : Table 14-2 : represents the payoff matrix of firms A and B,when they choose to produce low or high output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. -Refer to Table 14-2.Which of the following statements about the two firms must be true?

Which of the following is the best explains the moral hazard problem?

Use the following table to answer the question : Table 14-1 : shows the payoffs to Firm A and Firm B if they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm A's payoffs and the figure on the right indicates Firm B's payoffs. -Refer to the payoff matrix in Table 14-1.Which of the following describes the dominant-strategy equilibrium in this game?

_____ is the term used to describe the total amount of the hospital cost that is borne by a patient before insurance coverage becomes effective.

Fred was suffering from a nasal tissue blockage that could be corrected either through an operation or with medical treatment for about two months.Fred's doctor clearly told him that the condition was not acute and he did not need surgery.Fred,however,insisted on the surgical removal of the blockage,being aware that his medical insurance would cover the entire cost of this surgery.The situation described here can be associated with which of the following problems?

Use the following table to answer the question : Table 14-2 : represents the payoff matrix of firms A and B,when they choose to produce low or high output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. -Given the information in Table 14-2,which of the following can be concluded about the strategies of the two firms?

Which of the following is likely to result from successful advertising?

Which of the following practices allows insurance firms to reduce the costs imposed by the high-risk customers?

Empirical analysis with respect to the used car market suggests that:

Which of the following is likely to occur if two firms in a duopoly market decide to collude and produce the same output and charge the same price?

The view that advertising serves as a source of information suggests that advertising is:

The table given below represents the payoff matrix of firms A and B,when they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. If X = 10 and Y = 15,then from the information in Table 14-3 we can say that:

Adverse selection describes a situation in which:

Asymmetric information describes a situation in which:

Moral hazard describes a situation in which:

Use the following table to answer the question : Table 14-3 : represents the payoff matrix of firms A and B,when they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. -If X = 15 and Y = 10,then the information in Table 14-3 implies that:

Game theory is a method of analyzing:

Which of the following is true for a two-person game which has a Nash equilibrium?

People are not always fully informed about product quality because:

The table given below represents the payoff matrix of firms A and B,when they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. If X = 10 and Y = 15,then which of the following conclusions can be drawn from the information given in Table 14-3?