Will and Grace have adjoining unfenced back yards and each has just adopted a new puppy. Will values a fence between their yards at $250 and Grace values a fence between their yards at $200. The cost of building the fence is $300, which will be split equally if they both agree to build the fence. Therefore, their payoff matrix is as follows. 
This game is a(n) ________ because ________.
A. example of logrolling; both neighbors need to cooperate to provide the good.
B. prisoner's dilemma; by playing their dominant strategy, both Will and Grace do worse than if they had both played their dominated strategy.
C. inequitable situation; Grace does not value a fence as highly as does Will.
D. tragedy of the commons; the backyard is treated as a common area by the puppies.
Answer: B
You might also like to view...
Which of the following might be considered an automatic fiscal stabilizer?
A) government spending for the war effort B) 401(k) retirement program C) government budgeting for education D) unemployment compensation
The concept of "the invisible hand" suggests that markets
A) do not produce the efficient quantity. B) are always fair. C) produce the efficient quantity. D) are unfair. E) allocate resources unfairly and inefficiently.
Water is plentiful in most of the world, so its price and total utility are low
a. True b. False Indicate whether the statement is true or false
Macro disturbances can be caused by changes in
A. Government spending only. B. Exports only because this is the only type of expenditure that is not controllable. C. Consumption, investment, government spending, or exports. D. Investment only.