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15.2   Oligopoly Games 1) All games share four common features. They

Question : 15.2   Oligopoly Games 1) All games share four common features. They : 1418028

 

15.2   Oligopoly Games

 

1) All games share four common features. They are

A) costs, prices, profit, and strategies.

B) revenues, elasticity, profit, and payoffs.

C) rules, strategies, profit, and outcome.

D) patents, copyrights, barriers to entry, and rules.

E) rules, strategies, payoffs, and outcome.

 

2) Prisoners' dilemma describes a case where

A) collusion of the participants leads to the best solution from their point of view.

B) rivalry among a large number of rivals leads to lower overall profit.

C) one prisoner has no chance to be acquitted since there is no other prisoner to support his testimony.

D) a prisoner has no incentive to confess to his crime, and stands a greater chance of not going to prison.

E) rivalry of the participants leads to the worst solution from their point of view.

 

Use the table below to answer the following questions.

 

Table 15.2.1

 

 

 

3) Refer to Table 15.2.1. This table includes the sentences that Bob and Joe will receive if convicted. They have been apprehended by the police under the suspicion of committing armed robbery. The two are immediately separated and questioned about the case. Which one of the following observations is correct?

A) Bob would be smart to confess no matter what Joe does.

B) Joe would be smart not to confess no matter what Bob does.

C) Both Bob and Joe would be better off not confessing if they both do not confess.

D) Both Bob and Joe would be better off "coming clean" and confessing to their crime.

E) Both Bob and Joe have a dominant strategy of not confessing.

4) Refer to Table 15.2.1. This table includes the sentences that Bob and Joe will receive if convicted. They have been apprehended by the police under the suspicion of committing armed robbery. The two are immediately separated and questioned about the case. Which one of the following observations is correct?

A) If Joe confesses, Bob would be better off not confessing.

B) If Bob confesses, Joe would be better off confessing.

C) The outcome of the game, assuming Joe and Bob cannot collude, is they will both go free.

D) If Joe does not confess, Bob would be better off confessing.

E) The outcome of the game, assuming Joe and Bob cannot collude, is they will both confess.

 

5) Which one of the following is not a feature common to all games?

A) rules

B) collusion

C) strategies

D) payoffs

E) an outcome

 

6) In the prisoners' dilemma with players Art and Bob, each prisoner would be best off if

A) both prisoners confess.

B) both prisoners deny.

C) Art denies and Bob confesses.

D) Bob denies and Art confesses.

E) none of the above is done.

 

7) In the prisoners' dilemma, with players Art and Bob, the dominant strategy equilibrium is that

A) both prisoners confess.

B) neither prisoner confesses.

C) Art denies and Bob confesses.

D) indeterminate.

E) Bob denies and Art confesses.

8) A dominant strategy equilibrium occurs when

A) there is a clear strategy for each player independent of the other player's actions.

B) each player takes the best possible action given the other player's action.

C) each player complies with the collusive agreement.

D) you cooperate until the other player cheats, and then you cheat forever.

E) none of the above.

 

9) A Nash equilibrium occurs when

A) there is a clear strategy for each player independent of the other player's actions.

B) each player takes the best possible action given the other player's action.

C) each player complies with the collusive agreement.

D) you cooperate until the other player cheats, and then you cheat forever.

E) none of the above.

 

10) For a cartel to succeed,

A) it does not need the cooperation of a majority of firms in the industry.

B) there must be free entry of rival firms.

C) consumers must have alternative products available to satisfy the same need.

D) no major producer can remain outside the agreement of the cartel.

E) the industry must have an elastic demand.

 

 

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