Question

1. Charging different prices for different units of a good is called:

☐ a. Monopoly power.

☐ b. Index pricing.

☐ c. Price discrimination.

☐ d. Markup pricing.

☐ e. None of the above.

2. Which of the following statements is true:

☐ a. A Nash equilibrium is always a dominant strategy equilibrium.

☐ b. If there exists a dominant strategy equilibrium then there also exists a Nash equilibrium.

☐ c. There may be more than one dominant strategy equilibrium.

☐ d. There is always at least one Nash equilibrium.

☐ e. None of the above.

3. In the prisoner's dilemma:

☐ a. There is no Nash equilibrium.

☐ b. There is no dominant strategy equilibrium.

☐ c. The outcome is inefficient.

☐ d. The Nash equilibrium and the dominant strategy equilibrium lead to the same outcome.

☐ e. Both (c) and (d) are true.

4. Fill in the blanks: a. A _ _________ strategy means that you pick the best choice given what the other player is doing. b. A ___ __ _ strategy means that your choice is the best no matter what the other player does. 5. In the matching pennies game:

☐ a. There is no Nash equilibrium.

☐ b. Both players can be made better off then they are at the Nash equilibrium.

☐ c. Both players have a dominant strategy.

☐ d. Both players are better off if it is played as a sequential game.

☐ e. All of the above.

Answer 1

Q- 1) Charging different prices for different units of a good is called:

Answer- (C) Price discrimination.

Q- 2) Which of the following statement is True:

Answer- (B) If there exists a dominant strategy equilibrium then there also exists a Nash equilibrium.

Q- 3) In the prisoner's dilemma:

Answer- (E) Both (c) and (d) are true .

Q- 4) Fill in the blanks:

(a) A Dominant strategy means that you pick the best choice given what the other player is doing.

(b) A Dominant strategy means that your choice is the best no matter what the other player does.

Q- 5) In the matching pennies game:

Answer- (E) All of the above.