Answer the following statement(s) true (T) or false (F)
1. The Battle of the Sexes game has two Nash equilibria, neither of which is Pareto optimal.
2. All outcomes in the Copycat Game are Nash equilibria.
3. A solution concept is any way of analyzing a game which leads to the discovery of a Nash equilibrium which solves the game.
4. The concept of Nash Equilibrium is an important solution concept because it helps make predictions.
5. When a game has more than one Nash equilibrium, it is unlikely that a stable equilibrium will ever be reached.
1. True
2. False
3. False
4. True
5. False
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If the Fed sets a target exchange rate that is higher than the current exchange rate, then
A) the Fed must sell dollars. B) the Fed must buy dollars. C) the Fed can do nothing in the short run. D) will try to print more dollars for foreign distribution.
Allison's Auto Art is a company that applies pinstripes to vehicles. Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total price of $175, Allison will apply a fancier 3-color pinstripe application to
an automobile, a service that adds an additional $40 to the total cost of the package. What is the marginal cost of moving up from the 1-color application to the 3-color application? A) $35 B) $40 C) $80 D) $175