Comment on the following statement: "If one player in the game does not have a dominant strategy, it is impossible to predict the outcome of the game."
What will be an ideal response?
The statement is false. If one player has a dominant strategy and the other player knows it, then the outcome is predictable. For example, if player A will go right when player B moves left and vice versa, we can predict what player A will do if player B has a dominant strategy. If player B's dominant strategy is to move right, then we know that player A will move left.
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According to this Application, one strategy proposed to deal with the rising expenses of government entitlement programs is for the government to save and invest now so as to reduce the burden on future generations. This strategy would
A) not change GDP, but shrink entitlement programs. B) increase GDP and eliminate entitlement programs. C) increase GDP, and entitlement programs would increase along with GDP. D) increase GDP and entitlement programs would decrease.
As the banking system in the United States evolves, it is expected that
A) the number and importance of small banks will increase. B) the number and importance of large banks will decrease. C) small banks will grow at the expense of large banks. D) the number and importance of large banks will increase.
Suppose a company that produces furniture wax branches out into producing a dusting product like Lemon-Dust-Away. If this expansion is efficient, the company must
a. benefit from vertical integration b. benefit from horizontal integration c. experience economies of scale d. experience economies of scope e. have no transaction costs
If the income elasticity of demand for a good is positive, the good is a normal good
a. True b. False Indicate whether the statement is true or false