Melissa Buehrlen
Instructor Somers
Managerial Economics
05/20/2013
Assignment Three Practice Problems
Multiple Choice
Identify the choice that best completes the statement or answers the question.
Table 17-14
This table shows a game played between two players, A and B. The payoffs in the table are shown as (Payoff to A, Payoff to B).
B
Right
Left
A
Up
(2, 2)
(3, 1)
Down
(1, 3)
(0, 0)
____ 1. Refer to Table 17-14. If player A chooses his/her best strategy, player B should
a.
choose right and earn a payoff of 2.
b.
choose right and earn a payoff of 3.
c.
choose left and earn a payoff of 1.
d.
choose left and earn a payoff of 0.
____ 2. Refer to Table 17-14. If both players choose their best strategies, player A will earn a payoff of
a.
0.
b.
1.
c.
2.
d.
3.
____ 3. Refer to Table 17-14. Which of the following statements about this game is true?
a.
Up is a dominant strategy for A and Right is a dominant strategy for B.
b.
Up is a dominant strategy for A and Left is a dominant strategy for B.
c.
Down is a dominant strategy for A and Right is a dominant strategy for B.
d.
Down is a dominant strategy for A and Left is a dominant strategy for B.
____ 4. Refer to Table 17-14. Which outcome is the Nash equilibrium in this game?
a.
Up-Right
b.
Up-Left
c.
Down-Right
d.
Down-Left
____ 5. In general, game theory is the study of
a.
how people behave in strategic situations.
b.
how people behave when the possible actions of other people are irrelevant.
c.
oligopolistic markets.
d.
all types of markets, including competitive markets, monopolistic markets, and oligopolistic markets.
____ 6. Game theory is important for understanding which of the following market types?
a.
perfectly competitive and oligopolistic markets
b.
perfectly competitive markets but not oligopolistic markets
c.
oligoplistic but not perfectly competitive markets
d.
neither oligopolistic nor perfectly competitive markets.
Chapter 7:…