What is "game theory"?
What will be an ideal response?
A formal mathematical approach to examining the strategies used by individuals to make decisions when they know that their actions will affect the decisions of other individuals, and the other individuals take this into account in their decision making. It is particularly useful in analyzing business decision making in oligopolistic markets where firms are mutually interdependent.
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Which of the following is NOT an expression for the cost minimizing combination of inputs?
A) MRTS = MPL /MPK B) MPL/w = MPK/r C) MRTS = w/r D) MPL/MPK = w/r E) none of the above
Which of the following may result when workers have much better information about their own productivities than employers have?
a. discrimination b. natural selection c. principal-agent problems d. unemployment e. adverse selection
Foreign direct investment is when:
A. a firm runs part of its operation abroad or invests in another company abroad. B. investors buy foreign financial assets like stocks, bonds, or government securities. C. investment is funded by foreign sources but operated domestically. D. when a foreign government directly invests into a firm.
In order for a central planner to achieve the invisible-hand type efficiency of a free market, the planner would
A. need masses of statistics. B. be required to makes enormous calculations. C. need to be able to measure a consumer’s marginal utility in order to equate MU with MC. D. All of the above would be required.