Define the following terms and explain their importance to the study of economics
a. maximin criterion
b. Nash equilibrium
c. Dominant Strategy
d. Zero-sum game
e. Credible threat
a. Maximin criterion means selecting the strategy that yields the maximum payoff, on the assumption that an opponent does as much damage as he/she can. This method is employed in a game theory analysis of oligopoly.
b. A Nash equilibrium is one in which each player adopts the move that yields the highest possible payoff to himself, given the move selected by the other player. This is an analytically useful strategy in game theory used in seeking to understand the behavior of oligopolists.
c. A Dominant Strategy is a strategy for one of the competitors in a game that will yield a higher payoff than any other strategies that are possible for her, no matter what choice of strategy is made by her competitors.
d. A Zero-Sum game is a game in which the exact amount that one competitor gains must be lost by other competitors. It was once thought that international trade was this type of game.
e. A Credible threat is a threat that one's opponent has reason to think will be carried out. Credible threats are essential in the study of repeated games.
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In the short-run, a tax increase
A) shifts the DD curve to the right, increases output and appreciates the currency. B) shifts the AA curve to the left, increases output and depreciates the currency. C) shifts the AA curve to the left, decreases output and depreciates the currency. D) shifts the AA curve to the left, increases output and appreciates the currency. E) shifts the DD curve to the left, decreases output and depreciates the currency.
Which of the following is not a type of trade restriction?
a. low-interest loans to foreign buyers b. export subsidies for domestic firms c. domestic content requirements d. restrictive health and safety standards e. economies of scale
The vertical distance between the total cost and the total variable cost curves differs by an amount that:
A. initially increases, but then decreases, as output increases. B. is constant as output changes. C. decreases as output increases. D. increases as output increases.
You have $900 in your checking account when your EFTS card and PIN are stolen. You could lose up to ____ if you report the lost EFTS card within 60 business days.
Fill in the blank(s) with correct word