In the Nash equilibrium of a prisoner's dilemma:
A. both players have equal payoffs.
B. total economic surplus is maximized.
C. there is unrealized opportunity for both to gain.
D. there is no cash left on the table.
Answer: C
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Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few months, Lola drives less on the weekends to try to save money. Within the year, she sells her home and purchases one only 10 miles from her place of employment. These examples illustrate the importance of
a. the availability of substitutes in determining the price elasticity of demand. b. a necessity versus a luxury in determining the price elasticity of demand. c. the definition of a market in determining the price elasticity of demand. d. the time horizon in determining the price elasticity of demand.
Keynes believed that economies experiencing high unemployment should adopt policies to
a. reduce the money supply. b. reduce government expenditures. c. increase aggregate demand. d. increase aggregate supply.
Income lost by the unemployed is an example of the ________ cost of unemployment, while the additional spending to control crime is an example of the ________ cost of unemployment.
A. economic; psychological B. social; psychological C. economic; social D. psychological; economic
Refer to Table 3.1 to answer the following questionTable 3.1 Individual Demand and Supply SchedulesQuantity Demanded byPriceAlejandroBenCarlMarket$8.00842________6.001244________4.002046________2.002246________Quantity Supplied byPriceAveryBrandonCassandra $8.006046________$6.004244________$4.002442________$2.00640________In Table 3.1, if the price is $4, the market will
A. Experience a surplus of 56 units. B. Experience a shortage of 22 units. C. Experience a surplus of 30 units. D. Be in equilibrium.