Answer the following statement(s) true (T) or false (F)
1. When both players have dominant strategies, there is one and only one Nash equilibrium.
2. In any game situation, at least one player always has a dominant strategy.
3. An outcome is a Nash equilibrium if and only if both players agree that the outcome is desirable.
4. The main problem in the Prisoners' Dilemma is that the players involved fail to agree on an outcome that would be mutually beneficial.
1. True
2. False
3. False
4. True
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The average total cost curve is U-shaped. At the quantity of output where average total cost is at its minimum, is the marginal cost curve above the average total cost curve, below the average total cost curve,
or intersecting the average total cost curve?
Which of the following is not a determinant of a firm's cost functions?
A) The production function. B) The price of labor. C) The productivity of the firm's capital stock. D) The price of the firm's output.
All of the following are government purchases except
A) the salary paid to Senator John Cornyn of Texas. B) the presidential pension paid to former President George H.W. Bush. C) the purchase of a new office building for the CIA. D) the purchase of new radar tracking equipment for the Navy.
Assume the price of gasoline is $2.40 per gallon, and the equilibrium quantity of gasoline is 12 million gallons per day with no tax on gasoline. Starting from this initial situation, which of the following scenarios would result in the largest deadweight loss?
a. A 10 percent increase in the price of gasoline reduces the quantity of gasoline demanded by 2 percent and it increases the quantity of gasoline supplied by 5 percent; and the tax on gasoline amounts to $0.40 per gallon. b. A 10 percent increase in the price of gasoline reduces the quantity of gasoline demanded by 2 percent and it increases the quantity of gasoline supplied by 7 percent; and the tax on gasoline amounts to $0.40 per gallon. c. A 10 percent increase in the price of gasoline reduces the quantity of gasoline demanded by 1 percent and it increases the quantity of gasoline supplied by 8 percent; and the tax on gasoline amounts to $0.35 per gallon. d. There is insufficient information to make this determination.