You have a dozen shirts and your roommate has six pairs of shoes worth roughly the same amount of money. You decide to swap six shirts for three pairs of shoes. In financial terms, neither of you gains anything. Explain why you are nevertheless both likely to be better off.
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You have a dozen shirts and your roommate has six pairs of shoes worth roughly the same amount of money. You decide to swap six shirts for three pairs of shoes. In financial terms, neither of you gains anything.
Explain why you are nevertheless both likely to be better off.
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- Brian and Matt own the only two bicycle repair shops in town. Each must choose between a low price for repair work and a high price. The yearly economic profits from each strategy are indicated in Figure bellow. The upper right side of each rectangle shows Brian's profits; the lower left side shows Matt's profits. Matt's Actions Low Price High Price Low Price Brian's Actions $1,500 $1,500 $200 $3,000 High Price $5,000 $200 $4,000 $4,000 Which of the following statements is correct for a one-trial game? The market equilibrium price is the low price. A market equilibrium price cannot be established unless Brian and Matt collude. A market equilibrium price cannot be established unless Brian or Matt engages in tit-for-tat strategy. A market equilibrium price cannot be established without repeated trials. The market equilibrium price is the high price.Use the scenario below to answer the question. Chocolate raisin protein bars are Duc’s favorite dessert. A local bakery sells them for $1.00 each. Duc buys one and eats it at the bakery. Duc decides that he wants another one, but is not willing to pay full price. He knows the owner of the bakery and wants to negotiate. He offers to buy two more protein bars at $0.75 each. He plans to eat one at the store and anther one later. The bakery owner agrees to the deals. What is the total utility of Duc’s decision? 00 75 50 00On your way home from Super Groceries, your car breaks down. It is a hot summer day and you have nobody to call. With little time before the food spoils, you decide to prioritize what to carry on the walk home. You choose to take three items with you. Since you will need all five items today, you will replace the two abandoned items at the corner store near your house, Convenient Grocers. The table contains the prices you paid for each good at Super Groceries and the prices you will need to pay at Convenient Grocers to replace the goods. Which three items should you save? OOOOO vegetables fruits eggs ham milk Item milk eggs ham vegetables fruits Price at Super Groceries $3.75 $3.80 $2.95 $3.80 $2.50 Price at Convenient Grocers $4.25 $2.95 $5.25 $3.05 $3.80
- Two roommates John and Joe are playing a simultaneous game of cleaning the apartment. If neither of them clean, the apartment gets filthy and both get a utility of 2. If John cleans and Joe doesn’t, John gets a utility of 1 and Joe gets a utility of 4. If Joe cleans and John doesn’t, Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment, they each get a utility of 3.What is the Nash equilibrium of this game? Group of answer choices Joe cleans, John doesn’t John cleans, Joe doesn’t Both of them clean the apartment Neither of them clean the apartmentImagine that you are at dinner with an acquaintance and that you are each independently choosing what to order for dinner: a burger (which costs $8), or a chicken ($12). In terms of enjoyment, you each have the same preferences: you value the burger at $14, chicken at $17. In other words, if you were dining alone and ordered a burger, your payoff would equal $14- $8 = $6. In this case, however, you will split the bill equally with your companion and thus your payoff depends both on your own order and the order of your acquaintance. Specifically, each diner's payoff is equal to the value of their own meal minus half the cost of the total bill. They also get a payoff of $2 when both of them choose the same meal. (a) Write down the normal form representation of the game in which both players are independently choosing between the actions Burger, Chicken. (b) What are pure and mixed Nash equilibria? Draw best response graphs according to beliefs.Catherine wins a non-transferable, non-refudnable ticket to attend Saturday's baseball game. Taylor plans to attend the same game, but she knows from experience she can purchase a $40 ticket the day of the game. On the day of the game, it is cold with off-and-on rain showers, weather that both Catherine and Taylor equally dislike, making the prospect of attending the game less attractive than before. If both Catherine and Taylor have the same tastes and rational: a. Is one of them more likely to attend the baseball game than the other? b. Instead of winning a ticket, assume that last week Catherine paid $40 for the non-trasnferable, non-refundable ticket to Saturday's game. Would this change whether or not one of them is more likely to attend the baseball game?
- Consider the following story: Charlie finds two fifty-pence pieces on the floor. His friend Dylan is standing next to him when he finds them. Chris can offer Dylan nothing at all, one of the fifty-pence pieces, or both. Dylan observes the offer made by Charlie, and can either accept the offer (in which case they each receive the split specified by Charlie) or reject the offer.If he rejects the offer, each player gets nothing at all (because Charlie is embarassed and throws the moneyaway).(a) Formulate this interaction as an extensive-form game. To keep things simple, players’ payoff is equal to their monetary gain.(b) List all histories of the game. Split these into terminal and non-terminal histories.(c) What are the strategies available to Charlie? What are the strategies available to Dylan? Draw the strategic-form game.(d) Find the pure-strategy Nash equilibria of this game.(e) What do you think will happen?You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashers, flopsicles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashers increases by 10%, the quantity of flopsicles sold decreases by 26% and the quantity of cannies sold increases by 14%. Your job is to use the cross-price elasticity between splishy splashers and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the…Two athletes of equal ability are competing for a prize of $12,000. Each is deciding whether to take a dangerous performance-enhancing drug. If one athlete takes the drug and the other does not, the one who takes the drug wins the prize. If both or neither take the drug, they tie and split the prize. Taking the drug imposes health risks that are equivalent to a loss of XX dollars. Complete the following payoff matrix describing the decisions the athletes face. Enter Player One's payoff on the left in each situation, Player Two's on the right. Player Two's Decision Take Drug Don't Take Drug Player One's Decision Take Drug , , Don't Take Drug , , True or False: The Nash equilibrium is taking the drug if X is greater than $6,000. True False Suppose there was a way to make the drug safer (that is, have lower XX). Which of the following statements are true about the effects of making the drug safer? Check all that…
- You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies, flopsicles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies decreases by 4%, the quantity of flopsicles sold increases by 5% and the quantity of kipples sold decreases by 5%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity…You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin pops, flopsicles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin pops decreases by 8%, the quantity of flopsicles sold increases by 6% and the quantity of cannies sold decreases by 8%. Your job is to use the cross-price elasticity between penguin pops and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity…Alice and Julia want to spend time together but have different preferences for their activities. They can choose between two options: going to a soccer game or watching a football game. Alice prefers football and Julia prefers the football game, but they both prefer being together over being apart. If they both choose to attend a soccer game then Julia receives a payoff of 2 and Alice a payoff of 1. If they both choose to attend a football game, then Julia receive a payoff of 1 and Alice a payoff of 2. If one chooses a football game and the other a soccer game then they both receive a payoff of O. The payout matrix below illustrates these payoffs. Which of the following statements are true: I. There is a dominant strategy II. A nash equilibrium exists where Alice attends a football game and Julia attends a soccer game III. A nash equilibrium exists where both friends attend a soccer game IV. Both attending a football game is a stable outcome. Alice Soccer Football Julia Soccer Football…
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