Loose Leaf Microeconomics with Connect Access Card
20th Edition
ISBN: 9781259287084
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 8, Problem 7DQ
To determine
Impact of framing effect in fund raising.
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Suppose that there are three beachfront parcels of land available for sale in Astoria, and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel.
Willingness and Ability to Purchase
(Dollars)
Alyssa
720,000
Brian
690,000
Crystal
680,000
Nick
900,000
Rosa
810,000
Tim
770,000
Which of these people will buy one of the three beachfront parcels? Check all that apply.
Alyssa
Brian
Crystal
Nick
Rosa
Tim
Assume that the three beachfront parcels are sold to the people you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a price of $732,500. This fourth parcel _____________be sold…
Assume the following game situation:
If Player A plays UP and Player B plays LEFT then Player A gets $1 and Player B gets $3.
If Player A plays UP and Player B plays RIGHT then Player A gets $2 and Player B gets $5.
If Player A plays DOWN and Player B plays LEFET then Player A gets $4 and Player B gets $2.
If Player A plays DOWN and Player B plays RIGHT then Player A gets $1 and Player B gets $1
What is the Mixed Strategy Equilibrium for Player B?
O. (LEFT, RIGHT) = (1/8, 3/8)
O. (LEFT, RIGHT) = (1/4, 3/4)
O. (LEFT, RIGHT) = (1/2, 1/2)
O. (LEFT, RIGHT) = (3/8, 1/8)
Newfoundland’s fishing industry has recently declined sharply due to overfish- ing, even though fishing companies were supposedly bound by a quota agree- ment. If all fishermen had abided by the agreement, yields could have been maintained at high levels. LO4
Model this situation as a prisoner’s dilemma in which the players are Company A and Company B and the strategies are to keep the quota and break the quota. Include appropriate payoffs in the matrix. Explain why overfishing is inevitable in the absence of effective enforcement of the quota agreement.
Provide another environmental example of a prisoner’s dilemma.
In many potential prisoner’s dilemmas, a way out of the dilemma for a would-be cooperator is to make reliable character judgments about the trustworthiness of potential partners. Explain why this solution is not avail-
able in many situations involving degradation of the environment.
Chapter 8 Solutions
Loose Leaf Microeconomics with Connect Access Card
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