QUESTION 1

Every 2 x 2 game has at least one mixed-strategy Nash Equilibrium

A. True

B. False

QUESTION 2

Consider the game below.The only pure strategy equilibrium(s)is (are):

Player 2

A B

Player 1 C 4,2 2,1

D 2,3 3,4

A. {C,B} and {D,A}

B. {C,A}

C. {D,B}

D. {C,A}and {D,B}

QUESTION 3

Consider the game below. There is a mixed strategy equilibrium at:

Player 2

A B

Player 1 C 4,2 2,1

D 2,3 3,4

A. no mixed strategy equilibrium exists

B. Player 1 plays C with probability =1/2 and Player 2 plays A with probability = 2/3

C. Player1 plays C with probability=1/2and Player2 plays B with probability=2/3

D. Player1 plays C with probability=2/3and Player2 plays A with probability=1/3

QUESTION 4

Where a signalling mechanism exists that produces a pooling equilibrium, this will

A. Increase trade

B. Decrease trade

C. Not impact trade

QUESTION 5

Now that he has insurance on his cell phone,Michael is less careful about keeping it safe.This is an example of:

A. Adverse Selection

B. Signalling

C. Moral Hazard

QUESTION 6

Consider a firm with cost function: c(q) = 50q^2 + 10q + 500: What is the equation for the firm's supply curve?

A. q=50p + 10

B. q=p/100-0.1

C. q = 100p + 10

D. q=100/p + 10

QUESTION 7

Consider again the firm with cost functionc(q)=50q^2+10q+500.At what output level is average cost minimized?

A. q=10

B. q=5^0.5

C. q=10^0.5

D. q=50

QUESTION 8

Consider the production function,q = k^(3/4)l^(1/3).This production function exhibits

A. Constant returns to scale

B. Increasing returns to scale

C. Decreasing returns to scale

D. It is not possible to say from the information given

QUESTION 9

Consider the production function q =kl-0.8k^2-0.2l^2.Ifk = 20,at what level of l is the average product of labour maximized?

A. l=40

B. l=10

C. l = 20

D. l=320

QUESTION 10

The price of sugar used by a cost-minimizing bakery increases.The bakery responds by changing its demand for some inputs but keeps the output constant. What happens to the amount of sugar used?

A. Decreases or stays the same

B. Increases or stays the same

C. Stays the same