1) Consider a simultaneous move game between a union and a company. If both the parties bargain hard, each would gain nothing. If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million, while if they both accommodate, they each get $3 million.

If the union leader has already sent strikers to the picket line before entering negotiations, the union has

a.Eliminated half of the strategies of the game

b.Forced the firm to choose the best response in the union's best interest

c.Made it in the firm's best interest to accommodate their requests

d.All of the above

2) Two roommates John and Joe are playing a simultaneous game of cleaning the apartment. If neither of them clean, the apartment gets filthy and both get a utility of 2. If John cleans and Joe doesn't, John gets a utility of 1 and Joe gets a utility of 4. If Joe cleans and John doesn't, Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment, they each get a utility of 3.

If the roommates played the game repeatedly where one roommate not cleaning this time would trigger the other roommate not cleaning next time, the Nash equilibrium is most likely to be

a.Joe cleans, John doesn't

b.Both of them clean

c.Neither of them clean

d.John cleans, Joe doesn't

3) Nash equilibrium is:

a.where the outcome is always efficient

b.when each player's strategy is the best response to the other player's strategy

c.where one player maximizes his payoff and the other doesn't

d.difficult to determine