A photograph processing machine company requiring customers who buy a processing machine to purchase chemicals and photographic paper from it is an example of A) bundling. B) a requirement tie-in sale. C) nonlinear pricing. D) two-part pricing. ANSWER B
Date: September 9th, 2020
One interesting feature of a prisoner’s dilemma game is that A) non-cooperative behavior leads to lower payoffs than cooperative behavior. B) it was only valid before the industrial revolution. C) individuals behave irrationally when they behave non-cooperatively. D) cooperative behavior leads to lower payoffs than non-cooperative behavior. ANSWER A
Date: September 9th, 2020
One way to ensure cooperation in an infinitely repeated simultaneous game is A) to always play the dominant strategy. B) to punish the player that reneges on agreements. C) to never punish any player. D) to always punish all players. ANSWER B
Date: September 9th, 2020
Which of the following is a dynamic game? A) rock-paper-scissors B) flipping pennies C) chess D) the card game “war” ANSWER C
Date: September 9th, 2020
Why don’t we see firms tie in the sales of fish filets with the sales of pencils? A) because the demands for these two goods are positively correlated B) because the demands for these two goods are negatively correlated C) because the demands for these two goods are independent D) It violates the Clean Food […]
Date: September 9th, 2020
A trigger strategy A) is always a dominant strategy. B) is used to punish the player that reneges on agreements. C) is used to reward the player that never reneges on agreements. D) is a best response whenever all players cooperate. ANSWER B
Date: September 9th, 2020
A firm that holds a monopoly in both goods stands to gain from a tie-in sale. A) True. B) False. C) True, which is why anti-trust laws exist. D) False, there are no dual monopolies. ANSWER B
Date: September 9th, 2020
Repeated games are conducive to A) explicit cooperation. B) tacit cooperation. C) corruption. D) failing to have a Nash equilibrium. ANSWER B
Date: September 9th, 2020
Consider a car dealership advertises a three-year lease at $250 per month. When you arrive to apply, you discover that the lease requires a down payment of $3600 dollars. You will undertake the lease if A) you value the lease at least $350 per month. B) you value the lease at least $250 per month, […]
Date: September 9th, 2020
Which of the following constitutes a mixed strategy Nash equilibrium of the Odds and Evens game? A) Play Even and Odd with 50% probability each. B) Play Even with 75% probability and Odd with 25% probability. C) Always play Even. D) This game has no mixed strategy Nash equilibrium. ANSWER A
Date: September 9th, 2020
