In one hour, Beth can produce 40 caps or 5 jackes, and joan can produce 20 caps or 10 jackets. Which of the following trades would at least one of them NEVER be willing to make? Beth gives Joan 3 caps and joan gives Beth 1 jacket Bech gives joan 9 caps and joan gives Beth 1 jacket Bech gives Joan 5 caps and Joan gives Beth 1 jacket Beth gives Joan 7 caps and joan gives Beth 1 jacket O O

In one hour, Beth can produce 40 caps or 5 jackes, and joan can produce 20 caps or 10 jackets. Which of the following trades would at least one of them NEVER be willing to make? Beth gives Joan 3 caps and joan gives Beth 1 jacket Bech gives joan 9 caps and joan gives Beth 1 jacket Bech gives Joan 5 caps and Joan gives Beth 1 jacket Beth gives Joan 7 caps and joan gives Beth 1 jacket O O

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 8MC

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Suppose Amber and Jade can spend their days making croissants or writing poems. Their output per hour at each activity is the following: Croissants Poems Amber 40 2 Jade 30 1/2 In this situation, can mutually beneficial trade occur? Select one: A. No, because Jade is more productive than Amber at both activities. B. Yes, if Amber specializes in making croissants and trades them to Jade for her poems. C. No, because Amber more productive than Jade at both activities. D. Yes, if Amber specializes in writing poems and trades them to Jade for her croissants.
Sadaam Hussein is deciding where to hide his weapons of mass destruction(WMD), while the United Nations is deciding where to look for them. Thepayoff to Hussein from successfully hiding WMD is 5 and from havingthem found is 2. For the UN, the payoff to finding WMD is 9 and from notfinding them is 4. Hussein can hide them in facility X, Y, or Z. The UNinspection team has to decide which facilities to check. Because the inspectors are limited in terms of time and personnel, they cannot check allfacilities.a. Suppose the UN has two pure strategies: It can either inspect facilitiesX and Y (both of which are geographically close to each other) orinspect facility Z. Find a Nash equilibrium in mixed strategies.b. Suppose the UN can inspect any two facilities, so that it has three purestrategies. The UN can inspect X and Y, X and Z, or Y and Z. Find aNash equilibrium in mixed strategies.
when selecting the lineup for relays, teams start with the slowest runner and finishwith the fastest. In Beijing 2008, Jamaica were the hot favorites to win the 4 X 100 since theUK and USA were disqualified in the semis. Moreover, Usain Bolt came into the lineup. Thisleft the Jamaicans to make a key decision: Which position should they run Bolt? Look at thesplits both Bolt and Asafa Powell had and mention which position each runner should havecome in in race time.
Daniel and Kevin are two hardworking builders for solo, independently-owned companies. They can produce Chairs and Tables. As a result, they each have PPFs (Possibilities Production Frontiers) that illustrate their production. Daniel's PPF is shown by the equation: Qc = 12 - 3Qt. Likewise, Kevin's PPF is shown by the equation: Qt = 12 - 3Qc. Since they trust each other and are honest in their terms, Daniel and Kevin trade with each other and only each other; they do not take their goods to markets, and they do not interact with outside sellers/buyers. Since they want to make sure that they provide for their families in the most fair way possible, they set up and agree upon a few terms of trade. The terms are as follows: FIRST, the terms of trade are 1 Chair in exchange for 1 Table. SECOND, each of them specializes according to their own comparative advantage. THIRD, since Kevin needs a few extra things, he CONSUMES 3 units of the goods that he produces. With that said, I have a few…
you and a friend decide to run a three mile race. If you agree to run together, you keep up with himfor the first mile, but you overexert yourself and run the last two miles at slower paces on your own. Tomake up for lost time, your friend runs the last two miles at a faster pace. Your mile times are 6:30, 7:00,and 7:30. Your friend’s times are 6:30, 6:00, and 6:00. If you both agree to run on your own, you run aconstant pace of 7:05 while your friend runs at a constant pace of 6:05. If you want to run together butyour friend wants to run solo, he runs his constant pace of 6:05. You, on the other hand, want to showhim that you can run faster, but you end up overexerting yourself after the first mile. You run times of6:20, 7:05, and 7:30. If he wants to run together but you do not, you both run at your pace of 7:05. Thissituation can be turned into an economic game, with the payoffs the overall race times. You each wantto run the fastest time you possibly can.(a) Who are the players in…
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Kayla and Kevin are friends who go together to a used textbook seller who has two copies ofthe biology book that they both need for their class this semester. The cost to the seller ofacquiring the books was $25 each and no other students will need this book. Kayla states thatshe is willing to pay $40 for the book, while Kevin says he is willing to pay $80. Which ofthe following describes the most likely conclusion to this scenario? Group of answer choices The seller will sell the books to both Kayla and Kevin for $40 each because if they tried tocharge Kevin a higher price, Kayla would engage in arbitrage. The seller will sell one book to Kayla for $40 and one book to Kevin for $80 because thismarket meets all three requirements for price discrimination. The seller will sell the books to both Kayla and Kevin for $80 each because Kevin's highervalue exceeds Kayla's willingness to pay. The seller will sell the books to both Kayla and Kevin for $25 each because that is howmuch the…
[MUST SHOW WORKI You and your friend Tom are stranded on a deserted island and need to survive by collecting firewood and fishing for food. You can collect 8 logs per hour or 200 calories of fish per hour. Your friend Tom can collect 3 logs per hour or 500 calories of fish per hour. Who has an absolute advantage in collecting firewood? Select one: O A. Both You and Tom. O B. Neither You nor Tom. O C. You. O D. Tom. O E. Impossible to calculate without more information.
3. Suppose that the various Balls of basketball or internet fame Lavar, Lamelo, Liangelo, Lonzo,and Spalding are considering playing in a 1-on-1 tournament. They get a payoff of 0 if theydecide not to participate. The following table illustrates their payoffs across the variousscenarios. 1 Player 2 Players 3 Players 4 Players 5 Players Lavar 10 4 2 -2 -5 Lamelo 10 7 5 2 -1 Liangelo 10 7 5 2 -1 Lonzo 10 8 7 6 5 Spalding 10 9 8 7 6 a. Find and describe all pure strategy Nash Equilibria.b. Suppose now Spalding, since it is in fact a literal basketball, gets a payoff of 0 in anycircumstance, being an inanimate object. The table is now as follows: 1 Player 2 Players 3 Players 4Players 5 Players Lavar 10 4 2 -2 -5 Lamelo 10 7 5 2 -1 Liangelo 10 7 5 2 -1 Lonzo 10 8 7 6 5 Spalding 0 0 0 0 0 Find and describe all pure strategy Nash Equilibria.
The accompanying tables give production possibilities data for Gamma and Sigma. All data are in tons. Gamma's production possibilities A B C D E Tea 120 90 60 30 0 Pots 0 30 60 90 120 Sigma's production possibilities A B C D E Tea 40 30 20 10 0 Pots 0 30 60 90 120 What are the limits of the terms of trade between Gamma and Sigma? Multiple Choice 1 tea = 2 pots to 1 tea = 6 pots 1 tea = 3 pots to 1 tea = 6 pots 1 tea = 2 pots to 1 tea = 3.5 pots 1 tea = 1 pot to 1 tea = 3 pots
You read about a traveling situation in which some airline passengers seem toget a “fast pass” through security and move effortlessly through the boarding process, while other passengers are waiting in long lines. In this example, the travellers who are moving quickly through the boarding process are probably: a) VIP passengers waiting longer more in an inconvenient lines b) Passengers who value time and convenience and are willing to pay additional fees for the privileges and other services c) Loyal passengers whom they knew beforehand in which line to go to avoid delays and inconveniences d) Government officials who are seated in the executive area
Imagine that two firms in two different countries want to bring a new product tomarket. Due to economies of scale, if both firms do this, they will both lose £50million. But if only one firm does this, it will gain £300 million.(a) What is the best strategy for firm A, if firm B has not yet entered the market, andwhy?(b) Illustrate this with a game theory diagram, showing appropriate payouts.(c) What is the welfare-maximising strategy for a government, and why?