The solution in the prisoner's dilemma is called the
a. loss minimizing solution
b. profit maximizing equilibrium
c. dominant-strategy equilibrium
d. revenue maximizing equilibrium
e. marginal revenue solution
QUESTION 2Property rights can be defined and enforced
a. only by the government
b. only by ethical norms
c. by the government and by ethical norms
d. only through constant renegotiation
e. by government, by informal social actions, and by ethical norms
QUESTION 3The payoff matrix refers to
a. the difference between total revenue and total cost at different price levels
b. a listing of the rewards and penalties associated with pursuing various strategies
c. the difference between average and marginal cost for the non-competitive firm
d. the difference between average and marginal revenue in a non-competitive industry
e. the difference between average variable and average total cost to the firm
QUESTION 4Oil is an example of a renewable resource.
a. True
b. False
QUESTION 5The term strategy in terms of game theory refers to
a. the relationship between price and marginal cost
b. the relationship between individual firm demand curves and the market demand curve
c. each firm's game plan in making decisions
d. the interrelationship between price and marginal revenue
e. the tendency for collusive firms to generate normal profits
QUESTION 6Some pollution occurs because property rights to some resources are well defined.
a. True
b. False
QUESTION 7The advantage of game theory is that it allows us to focus on the
a. individual firm's incentives to cooperate or not
b. relationship between the market and firm level demand curve
c. costs and benefits
d. government regulators and the firms in an industry
e. models where there are no barriers to entry
QUESTION 8All of the following are examples of negative externalities except one. Which is the exception?
a. water pollution
b. your roommate going on a diet
c. second-hand smoke
d. loud conversation in the workplace
e. your neighbor building a bomb shelter on her front lawn
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