Why is there a prisoners' dilemma?
What will be an ideal response?
Because both prisoners' must simultaneously decide whether to confess or not. Since they cannot be sure the other prisoner is not confessing, they have an incentive to confess.
You might also like to view...
When there is an externality in a market
A) government intervention may increase economic efficiency. B) the government should use price controls to enable the market to reach equilibrium. C) the externality will move the market to an economically efficient equilibrium. D) the externality will cause the market price to be less than or greater than the equilibrium price.
Which of the following is true for the period from Independence to 1860?
(a) The system of indentured servitude died out because it was seen to be immoral and inconsistent with the Constitution. (b) The system of slavery flourished because the relative price of slaves fell consistently. (c) The system of wage labor flourished as immigrant labor poured into the newly opened western lands. (d) European immigrants typically shunned agricultural labor as their ticket to the good life.
On August 5, 2003, a tragic fire destroyed a large Jim Beam whiskey factory in Kentucky. Assume that the U.S. market for whiskey is perfectly competitive, and that the market was originally in long run equilibrium. What would be the effects of such an incident?
a. An increase in supply would cause a reduction in price, which would then lead to entry of firms. b. A decrease in supply would cause an increase in price, which would then lead to entry of firms.` c. An increase in supply would cause an increase in price, which would then lead to entry of firms d. A decrease in supply would cause an increase in price, which would then lead to exit of firms. e. Price of the whiskey would remain unchanged and the existing firms would continue to earn zero economic profit.
The rate of real economic growth a. is underestimated using measures of income growth
b. is overestimated using measures of income growth. c. is underestimated using measures of technological growth. d. is overestimated using measures of technological growth.