Question 1

Game theory is:

Accepted Answer

A)   the study of how people behave strategically under different circumstances.
B)   used to predict the winners of only certain types of strategic games.
C)   used to evaluate the microeconomic choices that involve probabilities of different outcomes.
D)   the study of games of chance like solitaire or betting on horse races.E) A) and D)
F) B) and C)

Question 2

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade.They both will enjoy a higher grade when more effort is put into the project,but they also get pleasure from goofing off and not working on the project.The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
According to the figure shown,if Sarah puts forth low effort,then Joe should:

Accepted Answer

A)   put forth high effort.
B)   put forth low effort.
C)   leave the market.
D)   give an ultimatum.E) A) and D)
F) A) and C)

Question 3

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
Given the dominant strategy of MiiTunes according to the figure,we can predict that The Rock Shop:

Accepted Answer

A)   will enter and enjoy profits of $4 million.
B)   will enter and lose $2 million.
C)   will not enter and earn $0.
D)   Their actions cannot be predicted because they do not have a dominant strategy.E) All of the above
F) A) and B)

Question 4

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade.They both will enjoy a higher grade when more effort is put into the project,but they also get pleasure from goofing off and not working on the project.The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
According to the figure shown:

Accepted Answer

A)   there is no stable equilibrium to the game.
B)   both will act in their own self-interest and get a stable, but less than optimum, equilibrium.
C)   both will act in their own self-interest and get an optimum equilibrium that is stable.
D)   both have incentive to put forth high effort.E) B) and D)
F) None of the above

Question 5

According to the figure shown,Nike:

Accepted Answer

A)   has a dominant strategy to charge a high price.
B)   does not have a dominant strategy.
C)   will reach an optimum outcome by acting in its own self-interest.
D)   has a dominant strategy to charge a low price.E) B) and D)
F) A) and B)

Question 6

All games involve which of the following?

Accepted Answer

A)   Rules
B)   Chance events
C)   Dice
D)   CardsE) None of the above
F) B) and D)

Question 7

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
According to the figure,The Rock Shop:

Accepted Answer

A)   should enter the market, regardless of what MiiTunes chooses to do.
B)   should not enter the market, regardless of what MiiTunes chooses to do.
C)   does not have a dominant strategy.
D)   has more than one dominant strategy.E) A) and B)
F) None of the above

Question 8

According to the figure shown,if Nike charges a high price,then Adidas should:

Accepted Answer

A)   charge a high price.
B)   charge a low price.
C)   leave the market.
D)   give an ultimatum.E) None of the above
F) All of the above

Question 9

In repeated games:

Accepted Answer

A)   a noncooperative outcome is more likely than in a single-round game.
B)   cooperation never happens.
C)   a cooperative outcome is more likely than in a single-round game.
D)   players always cooperate and enjoy a mutually beneficial equilibrium.E) B) and D)
F) C) and D)

Question 10

Cooperative equilibriums:

Accepted Answer

A)   are impossible to reach in real life.
B)   never occur unless players act in their own self-interest.
C)   never result in positive-positive outcomes.
D)   can arise if a game is repeated.E) C) and D)
F) A) and B)

Question 11

An example of a payoff in a game would be:

Accepted Answer

A)   a salary.
B)   winning an election.
C)   having clean drinking water.
D)   All of these are examples of payoffs.E) A) and C)
F) None of the above

Question 12

While everyone wants a clean environment,it can be very hard to achieve.An approach governments could take to promote that outcome is to:

Accepted Answer

A)   create social norms.
B)   create and enforce strict laws and heavy fines.
C)   influence individual's incentives.
D)   All of these are ways governments can get the "green" behavior they want.E) None of the above
F) A) and C)

Question 13

For a commitment strategy to work:

Accepted Answer

A)   the punishment must be so bad that it outweighs the incentive to defect in the game.
B)   the punishment must occur immediately after the game is played.
C)   both players must agree to a punishment.
D)   no player may have a dominant strategy.E) A) and B)
F) A) and C)

Question 14

In game theory,an example of a payoff could be:

Accepted Answer

A)   being the first mover in a game.
B)   sharing information with a select few that others aren't privy to.
C)   monetary gains made by a player.
D)   giving an advantage to only one player.E) A) and D)
F) B) and C)

Question 15

An example of a real-life rule that might constrain people's behavior is:

Accepted Answer

A)   minimum wage legislation.
B)   having 24 hours in a day.
C)   the earth's limited supply of oil.
D)   All of these are examples of real-life rules.E) None of the above
F) B) and C)

Question 16

According to the figure shown,if Adidas charges a low price,then Nike should:

Accepted Answer

A)   charge a high price.
B)   leave the market.
C)   charge a low price.
D)   give an ultimatum.E) None of the above
F) A) and D)

Question 17

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
According to the figure,if The Rock Shop enters the market,MiiTunes should:

Accepted Answer

A)   charge a high price.
B)   charge a low price.
C)   leave the market.
D)   give an ultimatum to The Rock Shop.E) A) and D)
F) B) and C)

Question 18

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
According to the figure,if MiiTunes charges low prices,The Rock Shop should:

Accepted Answer

A)   enter the market and earn $4 million.
B)   enter the market and lose $2 million.
C)   not enter the market and earn $0.
D)   It cannot be determined what The Rock Shop will do.E) B) and D)
F) A) and C)

Question 19

Economists call a game that is played more than once:

Accepted Answer

A)   a repeated game.
B)   collusion.
C)   a commitment strategy.
D)   cooperative price play.E) C) and D)
F) None of the above

Question 20

Games:

Accepted Answer

A)   only have one outcome possible.
B)   with noncooperative equilibriums are always negative-negative outcomes.
C)   may have several stable outcomes.
D)   must have a dominant strategy present to reach a stable equilibrium.E) C) and D)
F) B) and D)

Exam 9: Game Theory and Strategic Thinking

Correct Answer
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An example of a payoff in a game would be:

Correct Answer
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An example of a real-life rule that might constrain people's behavior is:

Correct Answer
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Correct Answer
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In game theory,an example of a payoff could be:

Correct Answer
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Correct Answer
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According to the figure shown,if Adidas charges a low price,then Nike should:

Correct Answer
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While everyone wants a clean environment,it can be very hard to achieve.An approach governments could take to promote that outcome is to:

Correct Answer
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Economists call a game that is played more than once:

Correct Answer
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Cooperative equilibriums:

Correct Answer
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For a commitment strategy to work:

Correct Answer
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In repeated games:

Correct Answer
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According to the figure shown,Nike:

Correct Answer
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Correct Answer
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All games involve which of the following?

Correct Answer
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According to the figure shown,if Nike charges a high price,then Adidas should:

Correct Answer
verified

Correct Answer
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Game theory is:

Correct Answer
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Correct Answer
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Games:

Correct Answer
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Exam 9: Game Theory and Strategic Thinking

Correct AnswerverifiedShow Answer

An example of a payoff in a game would be:

Correct AnswerverifiedShow Answer

An example of a real-life rule that might constrain people's behavior is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In game theory,an example of a payoff could be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to the figure shown,if Adidas charges a low price,then Nike should:

Correct AnswerverifiedShow Answer

While everyone wants a clean environment,it can be very hard to achieve.An approach governments could take to promote that outcome is to:

Correct AnswerverifiedShow Answer

Economists call a game that is played more than once:

Correct AnswerverifiedShow Answer

Cooperative equilibriums:

Correct AnswerverifiedShow Answer

For a commitment strategy to work:

Correct AnswerverifiedShow Answer

In repeated games:

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According to the figure shown,Nike:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All games involve which of the following?

Correct AnswerverifiedShow Answer

According to the figure shown,if Nike charges a high price,then Adidas should:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Game theory is:

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Correct AnswerverifiedShow Answer

Games:

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Correct Answer
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