What is the Nash equilibrium of this game?
a. Both of them clean the apartment
b. John cleans, Joe doesn't
c. Joe cleans, John doesn't
d. Neither of them clean the apartment
QUESTION 2In general, the smaller the price elasticity:
a. the smaller the responsiveness of price to changes in quantity.
b. the smaller the responsiveness of quantity to changes in price.
c. the larger the responsiveness of price to changes in quantity.
d. the larger the responsiveness of quantity to changes in price.
QUESTION 3If the simultaneous game is instead changed into a sequential game where the shoplifter can see whether the security guard is vigilant or not before deciding to steal. What is the Nash equilibrium of the game?
a. Steal, Vigilant
b. Steal, Not vigilant
c. Not steal, Vigilant
d. Not steal, Not vigilant
QUESTION 4Which of the following statements is true
a. A firm should increase quantity as long as average cost is greater than price
b. A firm should increase quantity as long as price is greater than marginal cost
c. A firm should increase quantity as long as price is higher than average cost, regardless of the marginal cost
d. A firm should increase quantity as long as marginal cost is greater than price
QUESTION 5If the security guard is somehow certain that the shoplifter would not steal, his best response would be
a. Being watchful
b. Sleeping on the job
c. Run
d. Hide
QUESTION 6If MR>MC, then the firm should
a. increase production
b. decrease production
c. keep the prices constant
d. keep the production level constant
QUESTION 7If the security guard knows that the shoplifter has been caught before, his best response would be
a. Being watchful
b. Sleeping on the job
c. Run
d. Hide
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