What is a zero-sum game? Can you think of any zero-sum games in real life?
What will be an ideal response?
A zero-sum game is one in which one player's loss is another's gain, so the sum of the payoffs of both the players is zero. Zero-sum games occur when two or more firms are competing for consumers. For example, when you buy a Toyota Prius, Toyota's gain is another car manufacturer's loss. Poker is a zero-sum game; my winnings are your losses.
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In the economic way of thinking, individuals make "choices" only when they
A) follow their narrow, selfish interests. B) enjoy perfect and complete information about the consequences of their actions. C) act responsibly. D) pursue one project while sacrificing another. E) have mastered the lessons of economic theory.
In order for the law of diminishing returns to be present, we must have:
a. at least one factor of production to be fixed. b. output decreasing as more laborers are hired. c. the price of labor increasing as more workers are hired. d. simultaneous changes in labor and capital. e. double the output when labor input is doubled.