x Amir and Beatrice play the following game. Amir offers an amount of money € [0, 1] to Beatrice. Beatrice can either accept or reject. If Beatrice accepts, then Amir receives 1 - z dollars and Beatrice receives a dollars. If Beatrice rejects, then both receive no money. As in the Ultimatum Game, Amir cares only about maximizing the amount of money he receives. Beatrice, on the other hand, detests Amir, and therefore cares about the amount of money that both receive: if Amir receives y dollars and Beatrice receives a dollars, then Beatrice's payoff is a-ay where a > 0.
Q: Provide an example of a product or service that operates as a monopoly. Explain your answer. What…
A: Monopoly refers to the type of market in which there is only one seller.
Q: Suppose a firm’s long-run total cost (LTC) curve is given LTC=2Q3-12Q2+20Q, and the long-run…
A: supply curve is the upward sloping curve which shows positive relationship between price and…
Q: Suppose that the short-run aggregate supply curve is: π= 2 + 1.5 (Y-10), where it is inflation and Y…
A: Equilibrium is where the demand curve intersects the supply curve. So, At equilibrium aggregate…
Q: To manage cash flow, you should _____ and then subtract expenses you expect to incur. Select one:…
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: A market failure in banking occurs if: Information asymmetry exists between the borrower and the…
A: Investment is the payment that is guided into the international market to be paid today for future…
Q: Prunella raises peaches. She uses L units of labor, and T units of land to produce peaches. Her…
A: Disclaimer: - since you asked a multipart question, we are solving only 3 subparts as per…
Q: The following graph plots the short-run and long-run Phillips curves (SRPC and LRPC, respectively)…
A: According to the Phillips curve, unemployment and inflation have a consistent inverse relationship.…
Q: Briefly explain three reasons for regulating financial markets. How does each reason improve…
A: Financial market regulations are rules and restrictions imposed on the financial market of an…
Q: To encourage bike riding the State decides to completely subsidize the cost of bikes as well as…
A: Externalities: When a firm produces a good sometimes it creates cost or benefits for other firms. If…
Q: Refer to Figure 18-4. Under the Bretton Woods System of exchange rates, if the par exchange rate was…
A: An exchange rate is the rate at which one currency can be exchanged for another currency. Exchange…
Q: What is the Pareto optimal outcome? (Firm A is the left value in each pair, Firm B is the right…
A: Pareto optimal outcome is the state where no more changes is expected as this outcome is the best…
Q: L (workers) 0 1 2 3 4 5 6 7 Q (units) 0 90 210 320 420 510 590 660 MPL FC (units) (S) greater than…
A: Cost refers to the value of money that a business had to expend to manufacture its goods or…
Q: As in the lemons model, suppose that there is one seller and one buyer who may exchange a good of…
A: Lemon model: 1 seller, 1 buyer Value of good for seller = v Value of good for buyer = 3v/2 Fixed…
Q: If $4000 is taxed from the top earner and transferred to the lowest earner, would that increase or…
A: Introduction Depending on the overall economic levels of a nation, the definition of poverty may…
Q: nly typed answer Each firm in a competitive market has a cost function of C(q) = q − q 2 + q 3 .…
A: Over the long run, all firms tend to get only normal profit or price is equal to the AC of…
Q: A utility company is considering the following plans to provide a certain service required by resent…
A: Given information Plan R Initial investment=500000 Salvage value=20% of 500000 Annual maintenance…
Q: Three mutually exclusive design alternatives are being considered. The estimated cash flows for each…
A: Present value refers to the concept that states an amount of money today is valued more than that…
Q: Assume money supply increases at rate z. Explain what seigniorage is. Use formulas. What are the…
A: Ways to fund Govt. debts: Sometimes govt spending becomes more than what govt is earning back. As a…
Q: A U.S. exporter has a receivable of 20 million Canadian dollars (C$), due in 30 days. Name and…
A: Introduction to Trade: According to the information provided in the question, country-U's exporter…
Q: Sofia has set aside $50 to spend on DVDs and movie tickets. The table shows Sofia's marginal utility…
A: Marginal utility refers to the additional utility enjoyed by a consumer due to consumption of an…
Q: In an economy, the demand for deposits is 150,000 goods and the non-borrowed part of the monetary…
A: Reserve requirement refers to the minimum of total demand deposits a bank has to keep within itself.…
Q: A seller offers to sell an object to a buyer. The buyer and seller's valuations for the object, t…
A: A second-price sealed bid auction is a type of auction in which the player who bids the highest have…
Q: Results Real Estate had 6 home sales during the week: $150,000, $140,000, $240,000, $158,000,…
A: One of the measures of central tendency is mode Mode is easy to understand and calculate. Unlike…
Q: Consider the following variant of the alternating-offer bargaining model that differs from the…
A: Player will reject the offer if they could make more payoff in another stage and accept the offer if…
Q: 5. Assume than a non-competitive firm faces a downward sloping firm demand curve, P(Q), and has the…
A: The equilibrium of supply and demand in each market determines the price and quantity of the…
Q: high low high X, Y 3,8 B low 6 11 5,7 Figure 1 2. Consider the normal form game in Figure 1. If X =…
A: 2) Nash equilibrium is when there is an optimal outcome where there is no incentive for any player…
Q: a) What is the pre-tax equilibrium price of a domestic airline ticket? b) How much more will…
A: The effect of the tax on the supply-demand equilibrium is to shift the quantity toward a point where…
Q: 1. Suppose that the money market equilibrium equation mt-pt = -aEt Pt+1-Pt] where a > 0, and the…
A: Given information Equilibrium money function Money market equilibrium…
Q: Based on your current quantities and costs, can you sell a hamburger for $2 and still make a profit?
A: Profit refers to the money you have left after paying for business spending. There are 3 main types…
Q: In the Great Depression, countries with the worst contractions suffered ________ _____ Expansionary…
A: Expansionary policy is a kind of macroeconomic policy that is executed to invigorate the economy and…
Q: (d) Suppose instead the town government wants to regulate the monopolist to earn zero economic…
A: For profit maximization , a monopolist will produce where MR = MC MR is the marginal revenue MC is…
Q: Exhibit: Costs of Producing Bagels (cents) Quantity of Bagels per Period Costs 10 1 2 3 4 5 6 7…
A: Total cost is the sum of total fixed cost and total variable cost. Fixed cost are the cost that…
Q: O for Row. N for Column. O for Row and N for Column. In game i, if there is a Nash equilibrium in…
A: A game theoretic approach in economics refers to a tabular representation of strategies and payoffs…
Q: Briefly explain the FOUR stages of Budget cycle of the Union Government, with focus on the role of…
A: A government budget is the estimation of the government's revenue and expenditure during the coming…
Q: Which of the following would not be an example of a problem associated with moral hazard? Group of…
A: Moral hazard basically refers to a situation in which when one party participates in a risky…
Q: 13.3 Ganado’s Cost of Capital. Maria Gonzalez now estimates Ganado’s risk-free rate to be 3.60%, the…
A: The expected return on an asset is related to its beta by the capital asset pricing model (CAPM).…
Q: Describe the relationship between union wages and employment. (Be sure to develop your essay into…
A: Definition of Labor Union and Employment: A labor union is a workers' cartel that bargains with…
Q: Q8. Assume a closed economy. Suppose the capital-output ratio is 3, the depreciation rate is 3%, and…
A:
Q: For each of the production functions below, find the marginal products of both inputs, and indicate…
A: A brief introduction to the production function: A production function portrays the functional…
Q: When governments use monetary policies to mae sure most citizens can find jobs, they are pursing the…
A: The country's central bank use monetary policy to regulate the amount of money available in the…
Q: DPWH is considering building a new expressway going to Bicol to cut the travel time of consumers…
A: Given Investment cost 1000 million Annual operating and maintenance cost 17 million Revenue…
Q: The following graph plots the short-run Phillips curve for a hypothetical economy. The given point…
A: The Phillips curve visually depicts the economic link between the rate of unemployment (or the rate…
Q: Relative to a perfectly competitive market, as long as the monopolist does not benefit from…
A: Perfectly competitive markets are those markets where there are many buyers and sellers who have…
Q: How many employees should Martin's farm employ? How many employees should Martin's farm employ if…
A: Marginal product of labor is the change in total product due to an additional labor hired.…
Q: Using the information in the table shown, what can be said about the rate of inflation? If 2006 is…
A:
Q: iscal Policy is conducted by:______________________, and Monetary Policy is conducted…
A: Fiscal policy is when the government uses taxes and government spending as a policy measure. It…
Q: Consider a second-price sealed-bid auction of a single object with two bidders. Both bidders have…
A: A second-price sealed bid auction is a type of auction in which the player who bids the highest have…
Q: Mauro Products distributes a single product, a woven basket whose selling price is $23 per unit and…
A: The break-even point in economics, business and specifically cost accounting is the point at which…
Q: In Faria, a small monetary economy, the reserve requirement is 15%. By how much money supply changes…
A: The monetary base refers to the total amount of money that is either in the hands of the general…
Q: In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and…
A: Multiplier is given by the following formula :- Multiplier = 1/r r is the reserve ratio Reserves…
Step by step
Solved in 2 steps with 1 images
- Lee and Cody are playing a game in which Lee has the first move at A in the accompanying decision tree: Once Lee has chosen either aggression or cooperation, Cody, who can see what Lee has chosen, must choose either aggression or cooperation at B or C. Both players know the payoffs at the end of each branch. Lee chooses A Aggression Cooperation Cody chooses 8 Multiple Choice C Cody chooses Aggression aggression: aggression Cooperation Aggression In the equilibrium of this game, Lee chooses Cooperation aggression; cooperation -10 for Lee -10 for Cody 40 for Lee O for Cody O for Leo 40 for Cody 25 for Lee 25 for Cody and then Cody chooses.The chicken game has often been used to model crises. Recall that in this game, the two players drive straight at each other. They can choose to swerve or keep going straight. If one swerves, and the other goes straight, assume that the one that swerves gets -10 utility and the one that goes straight gets 10 utility, since the one that swerves is deemed the loser. If both swerve, both get 0 utility. If both go straight, they crash and get -50 utility. Assume both players have a discount rate of 0.9 Draw the stage game of date night List all pure strategy Nash equilibria of the single stage game Consider an infinite horizon version of Chicken. Can you get an SPNE in which the both players swerve using a grim trigger type strategy? Consider the following strategies: both players swerve, as long as neither ever went straight. If one player ever plays straight, in all subsequent rounds the player that swerved goes straight and the player that went straight swerves. Can you think…Consider the following two-player game.First, player 1 selects a number x≥0. Player 2 observes x. Then, simultaneously andindependently, player 1 selects a number y1 and player 2 selects a number y2, at which pointthe game ends.Player 1’s payoff is: u1(x; y1) = −3y21 + 6y1y2 −13x2 + 8xPlayer 2’s payoff is: u2(y2) = 6y1y2 −6y22 + 12xy2Draw the game tree of this game and identify its Subgame Perfect Nash Equilibrium.
- Suppose that, in an ultimatum game, the proposer may not propose less than $1 nor fractional amounts, and therefore must propose $1, $2, …, or $10 (see image attached below). The responder must Accept (A) or Reject (R). Suppose, first, that this game is played by two egoists, for whom u(x,y)=x. Find all subgame-perfect equilibria in this game. Suppose, second, that this game is played by two altruists, for whom u(x,y) = ⅔(x)1/2 + ⅓(y)1/2. Find all subgame-perfect equilibria in this game.Suppose players A and B play a discrete ultimatum game where A proposes to split a $5 surplus and B responds by either accepting the offer or rejecting it. The offer can only be made in $1 increments. If the offer is accepted, the players' payoffs resemble the terms of the offer while if the offer is rejected, both players get zero. Also assume that players always use the strategy that all strictly positive offers are accepted, but an offer of $0 is rejected. A. What is the solution to the game in terms of player strategies and payoffs? Explain or demonstrate your answer. B. Suppose the ultimatum game is played twice if player B rejects A's initial offer. If so, then B is allowed to make a counter offer to split the $5, and if A rejects, both players get zero dollars at the end of the second round. What is the solution to this bargaining game in terms of player strategies and payoffs? Explain/demonstrate your answer. C. Suppose the ultimatum game is played twice as in (B) but now there…Sophia is a contestant on a game show and has selected the prize that lies behind door number 3.The show’s host tells her that there is a 50% chance that there is a $15,000 diamond ring behindthe door and a 50% chance that there is a goat behind the door (which is worth nothing to Sophia,who is allergic to goats). Before the door is opened, someone in the audience shouts, “I will giveyou the option of selling me what is behind the door for $8,000 if you will pay me $4,500 for thisoption.” [Assume that the game show allows this offer.]a. If Sophia cares only about the expected dollar values of various outcomes, will she buythis option?b. Explain why Sophia’s degree of risk aversion might affect her willingness to buy thisoption
- $11. Anne and Bruce would like to rent a movie, but they can't decide what kind of movie to get: Anne wants to rent a comedy, and Bruce wants to watch a drama. They decide to choose randomly by playing "Evens or Odds." On the count of three, each of them shows one or two fingers. If the sum is even, Anne wins and they rent the comedy; if the sum is odd, Bruce wins and they rent the drama. Each of them earns a payoff of 1 for winning and 0 for losing "Evens or Odds." (a) Draw the game table for "Evens or Odds." (b) Demonstrate that this game has no Nash equilibrium in pure strategies.UNIT 9 CHAPTER 5 In a gambling game, Player A and Player B both have a $1 and a $5 bill. Each player selects one of the bills without the other player knowing the bill selected. Simultaneously they both reveal the bills selected. If the bills do not match, Player A wins Player B's bill. If the bills match, Player B wins Player A's bill. Develop the game theory table for this game. The values should be expressed as the gains (or losses) for Player A. Is there a pure strategy? Why or why not? Determine the optimal strategies and the value of this game. Does the game favor one player over the other? Suppose Player B decides to deviate from the optimal strategy and begins playing each bill 50% of the time. What should Player A do to improve Player A’s winnings? Comment on why it is important to follow an optimal game theory strategy.10. Player A and Player B are playing a game . First , Player A chooses to either " Keep " or " Pass " . Second , Player B observes A's choice and Player B then chooses to either Keep or Pass . This process continues which creates the sequential game below . Please mark decisions that rational and selfish players will choose at every decision node ( 3 decisions by player A and 3 decisions by player B ) - mark them on the Figure . What is the equilibrium of this game ?
- Two friends are deciding where to go for dinner. There are three choices, which we label A, B, and C. Max prefers A to B to C. Sally prefers B to A to C. To decide which restaurant to go to, the friends adopt the following procedure: First, Max eliminates one of three choices. Then, Sally decides among the two remaining choices. Thus, Max has three strategies (eliminate A, eliminate B, and eliminate C). For each of those strategies, Sally has two choices (choose among the two remaining). a.Write down the extensive form (game tree) to represent this game. b.If Max acts non-strategically, and makes a decision in the first period to eliminate his least desirable choice, what will the final decision be? c.What is the subgame-perfect equilibrium of the above game? d. Does your answer in b. differ from your answer in c.? Explain why or why not. Only typed AnswerConsider the following game - one card is dealt to player 1 ( the sender) from a standard deck of playing cards. The card may either be red (heart or diamond) or black (spades or clubs). Player 1 observes her card, but player 2 (the receiver) does not - Player 1 decides to Play (P) or Not Play (N). If player 1 chooses not to play, then the game ends and the player receives -1 and player 2 receives 1. - If player 1 chooses to play, then player 2 observes this decision (but not the card) and chooses to Continue (C) or Quit (Q). If player 2 chooses Q, player 1 earns a payoff of 1 and player 2 a payoff of -1 regardless of player 1's card - If player 2 chooses continue, player 1 reveals her card. If the card is red, player 1 receives a payoff of 3 and player 2 a payoff of -3. If the card is black, player 1 receives a payoff of 2 and player 2 a payoff of -1 a. Draw the extensive form game b. Draw the Bayesian form gameIn 'the dictator' game, one player (the dictator) chooses how to divide a pot of $10 between herself and another player (the recipient). The recipient does not have an opportunity to reject the proposed distribution. As such, if the dictator only cares about how much money she makes, she should keep all $10 for herself and give the recipient nothing. However, when economists conduct experiments with the dictator game, they find that dictators often offer strictly positive amounts to the recipients. Are dictators behaving irrationally in these experiments? Whether you think they are or not, your response should try to provide an explanation for the behavior.