Table 1 You and a classmate are assigned a project on which

Table 1 You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation: (First number in the cell of the payoff matrix represents your payoffs, second number the payoffs of your classmate.) Classmate Work Hard Don\'t Work Work Hard Don\'t Work 15, 15 30, 5 5,30 10, 10 You 42. Refer to Table 1. Pursuing your own best interests, when will you will work hard? a. only if Classmate works hard b. only if Classmate doesn\'t work hard c. regardless of the strategies that Classmate plays d. under no circumstances 43. Refer to Table 1. When this game reaches a Nash equilibrium, what will the grades for Classmate be? a. You 15 and Classmate 15 b. You 5 and Classmate 30 c. You 30 and Classmate 5 d. You 10 and Classmate 10 44. What does the height of the demand curve show? a how much cach buyer in the market is willing to pay b. the willingness to pay of the marginal buyer c. the maximum price all buyers will pay for a product d. the lowest price buyers will pay for a product 45. What are both public goods and common resources? a. rival b. excludable c. nonrival d. nonexcludable

Solution

42. When your Classmates work hard, your best response is to \'dont work\' as you\'ll get a payoff of 30 which is greater than 15 from working hard. If your Classmate \'dont work\', your best response is to \'dont work\' as the payoff 10 is greater than 5 from working hard.

It means no matter what your opponent plays you\'re always better off by choosing \'dont work\'. Therefore, under no circumstances you should work hard.

Answer-option D

43. Your dominant strategy is \'dont work\' (calculated in previous part) and similarly let\'s find out your opponent\'s dominant strategy.

When you work hard, your Classmate will choose don\'t work (because 30 > 15) and when you go for \'Dont work\', your Classmate will choose don\'t work (because 10>5) . It means your Classmate is always better off by choosing don\'t work. Therefore, don\'t work is your classmate\'s dominant strategy.

Both players have the dominant strategy of Don\'t work. Therefore, nash equilibrium is (Don\'t work, Don\'t work). Both of the players will get a payoff of 10 when this equilibrium is reached.

Answer-option D

44. Height of a demand curve shows maximum price a consumer is willing to pay.

Answer- option A

45. Public goods are non rivalry and non excludable. While, common property resources are rivalry but non excludable.

Answer-option D