What is the difference between the utility function of a risk averse person and a risk neutral person.
QUESTION 2Assume that deciding to do internally something that was once purchased from a company upstream offers a 10 percent return. What is the cost of this decision?
A) 10 percent.
B) less than 10 percent.
C) What was given up to do it internally.
D) Not enough information is provided.
QUESTION 3In the Prisoners' Dilemma game:
a. When the prisoners follow their dominant strategy and confess, both will be better off than if both had remained silent.
b. a player would be better off if he did not confess and the other player confessed.
c. a player would be better off if he confessed when the other player also confessed, but not if the other player did not confess.
d. None of the above is true.
QUESTION 4How is the utility of a gamble to a risk averse person different from that to a risk neutral person?
QUESTION 5If a firm decides to produce a product that it once purchased from a firm upstream it has made a
A) horizontal decision.
B) make or buy decision.
C) downstream decision.
D) sell or service decision.
QUESTION 6In the Prisoners' Dilemma game:
a. When the prisoners follow their dominant strategy and confess, both will be worse off than if each had remained silent.
b. a player would be better off if he did not confess and the other player confessed.
c. a player would be better off if both he and the other player confessed.
d. None of the above is true.
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