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Game Theory and Strategic Behavior

Description: This quiz is designed to test your understanding of Game Theory and Strategic Behavior.
Number of Questions: 15
Created by:
Tags: game theory strategic behavior economics
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Which of the following is a characteristic of a dominant strategy?

  1. It is always the best strategy for a player, regardless of the strategies of the other players.

  2. It is the strategy that maximizes a player's payoff.

  3. It is the strategy that minimizes a player's payoff.

  4. It is the strategy that is most likely to be chosen by a player.

Show answer
Correct Option: A
Explanation:

A dominant strategy is a strategy that is always the best strategy for a player, regardless of the strategies of the other players. This means that a player who chooses a dominant strategy will always get a better payoff than a player who chooses any other strategy.

In a zero-sum game, the gains of one player are:

  1. Exactly offset by the losses of the other player.

  2. Greater than the losses of the other player.

  3. Less than the losses of the other player.

  4. Unrelated to the losses of the other player.

Show answer
Correct Option: A
Explanation:

In a zero-sum game, the gains of one player are exactly offset by the losses of the other player. This means that the total amount of money or resources in the game remains constant, and one player's gain is always another player's loss.

Which of the following is an example of a Nash equilibrium?

  1. A situation in which each player's strategy is a best response to the strategies of the other players.

  2. A situation in which each player's strategy is a dominant strategy.

  3. A situation in which each player's strategy is a mixed strategy.

  4. A situation in which each player's strategy is a random strategy.

Show answer
Correct Option: A
Explanation:

A Nash equilibrium is a situation in which each player's strategy is a best response to the strategies of the other players. This means that no player can improve their payoff by changing their strategy, given the strategies of the other players.

Which of the following is a characteristic of a mixed strategy?

  1. It is a strategy in which a player randomly chooses among a set of pure strategies.

  2. It is a strategy that is always the best strategy for a player, regardless of the strategies of the other players.

  3. It is a strategy that maximizes a player's payoff.

  4. It is a strategy that minimizes a player's payoff.

Show answer
Correct Option: A
Explanation:

A mixed strategy is a strategy in which a player randomly chooses among a set of pure strategies. This means that the player's choice of strategy is not deterministic, and the other players cannot predict with certainty what strategy the player will choose.

In a game of perfect information, each player:

  1. Knows the strategies of all the other players.

  2. Knows the payoffs of all the other players.

  3. Knows the preferences of all the other players.

  4. Knows the beliefs of all the other players.

Show answer
Correct Option: A
Explanation:

In a game of perfect information, each player knows the strategies of all the other players. This means that each player knows exactly what each other player is going to do, and can make their own decisions accordingly.

Which of the following is an example of a cooperative game?

  1. A game in which the players can communicate with each other and make binding agreements.

  2. A game in which the players cannot communicate with each other or make binding agreements.

  3. A game in which the players are competing for a fixed prize.

  4. A game in which the players are cooperating to achieve a common goal.

Show answer
Correct Option: A
Explanation:

A cooperative game is a game in which the players can communicate with each other and make binding agreements. This means that the players can work together to achieve a common goal, and can share the benefits of their cooperation.

Which of the following is an example of a non-cooperative game?

  1. A game in which the players can communicate with each other and make binding agreements.

  2. A game in which the players cannot communicate with each other or make binding agreements.

  3. A game in which the players are competing for a fixed prize.

  4. A game in which the players are cooperating to achieve a common goal.

Show answer
Correct Option: B
Explanation:

A non-cooperative game is a game in which the players cannot communicate with each other or make binding agreements. This means that the players are competing against each other, and each player is trying to maximize their own payoff.

Which of the following is a characteristic of a tragedy of the commons?

  1. A situation in which a common resource is overused by multiple individuals.

  2. A situation in which a common resource is underused by multiple individuals.

  3. A situation in which a common resource is used efficiently by multiple individuals.

  4. A situation in which a common resource is not used at all by multiple individuals.

Show answer
Correct Option: A
Explanation:

A tragedy of the commons is a situation in which a common resource is overused by multiple individuals. This can lead to the depletion of the resource, and can have negative consequences for all of the individuals who rely on the resource.

Which of the following is an example of a public good?

  1. A good that is non-rivalrous and non-excludable.

  2. A good that is rivalrous and non-excludable.

  3. A good that is non-rivalrous and excludable.

  4. A good that is rivalrous and excludable.

Show answer
Correct Option: A
Explanation:

A public good is a good that is non-rivalrous and non-excludable. This means that one person's consumption of the good does not prevent another person from consuming the good, and that it is impossible to exclude anyone from consuming the good.

Which of the following is an example of a private good?

  1. A good that is non-rivalrous and non-excludable.

  2. A good that is rivalrous and non-excludable.

  3. A good that is non-rivalrous and excludable.

  4. A good that is rivalrous and excludable.

Show answer
Correct Option: D
Explanation:

A private good is a good that is rivalrous and excludable. This means that one person's consumption of the good prevents another person from consuming the good, and that it is possible to exclude people from consuming the good.

Which of the following is a characteristic of a natural monopoly?

  1. A situation in which a single firm can produce a good or service at a lower cost than any other firm.

  2. A situation in which a single firm has a patent on a good or service.

  3. A situation in which a single firm has a government-granted monopoly.

  4. A situation in which a single firm has a large market share.

Show answer
Correct Option: A
Explanation:

A natural monopoly is a situation in which a single firm can produce a good or service at a lower cost than any other firm. This can be due to economies of scale, economies of scope, or other factors.

Which of the following is a characteristic of a perfect competition market?

  1. A situation in which there are many buyers and sellers.

  2. A situation in which all firms produce identical products.

  3. A situation in which there is no product differentiation.

  4. A situation in which there is no entry or exit barriers.

Show answer
Correct Option: A
Explanation:

A perfect competition market is a situation in which there are many buyers and sellers, all firms produce identical products, there is no product differentiation, and there are no entry or exit barriers.

Which of the following is a characteristic of a monopoly market?

  1. A situation in which there is only one seller.

  2. A situation in which there are many buyers.

  3. A situation in which there is product differentiation.

  4. A situation in which there are entry or exit barriers.

Show answer
Correct Option: A
Explanation:

A monopoly market is a situation in which there is only one seller. This gives the seller market power, and allows them to set the price of the good or service.

Which of the following is a characteristic of an oligopoly market?

  1. A situation in which there are a few large sellers.

  2. A situation in which there are many buyers.

  3. A situation in which there is product differentiation.

  4. A situation in which there are entry or exit barriers.

Show answer
Correct Option: A
Explanation:

An oligopoly market is a situation in which there are a few large sellers. This gives the sellers market power, and allows them to influence the price of the good or service.

Which of the following is a characteristic of a monopolistic competition market?

  1. A situation in which there are many sellers.

  2. A situation in which there is product differentiation.

  3. A situation in which there are no entry or exit barriers.

  4. A situation in which there is perfect information.

Show answer
Correct Option: B
Explanation:

A monopolistic competition market is a situation in which there are many sellers, there is product differentiation, there are no entry or exit barriers, and there is imperfect information.

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