Short answer question

Short Answer Solutions: A) A Likelihood of smoking BY B OB Likelihood of smoking C) Kids Strategy: Your Strategy: D) Kids Payoff: Your Payoff: E) Name of Solution Method F) Comments:Part A (3 marks) You're back in high school. You've always kept clean and played by the rules. You've never played sick, owned fake ID, stayed out past curfew or even had as much as a cigarette in your life. There's this guy you've been crushing on since your freshman year. As you exit the school you see him in a small group of friends. You lock eyes and he calls you over. This is your chance. You head over. He introduces you to his mates. They are all smoking. He offers you a cigarette, passing it towards you. You hesitate. "Come on. Have one. Everyone does it." You know smoking is harmful and very addictive, but it's also your way into this clique. You realize if you say no then you'll just feel awkward and skulk away. This opportunity is unlikely to come again. Model this decision-making scenario using the MB/MC graph. Assume you start at the point marked A, and that after the shock you find yourself at a new equilibrium point B. Label the curves and axes appropriately. Graphically show the shock and derive and show the new equilibrium decision at point B. Note: the submitted solution needs to be on the solution page, not on the graph below. QA Likelihood of smoking Part B (3 marks) You quickly text your friend. "What should I do?" "You can always quit later. Just use the nicotine patch!" You consider this new information (your friend is a bad influence!) and incorporate that into your analysis using the MB/MC graph below. Show how your friend's insight affects your decision-making by continuing the analysis starting from your previously derived point B. Again, label the axes and curves below. Derive and show your new decision point C relative to the initial point B Do not show me any curves or points that not directly related to the transition from Equilibrium B to C. Do not include any content that is not directly relevant to Part B. QB Likelihood of smokingPart C (1 marks) Now you are all grown up and you have kids of your own. They are unruly, they don't listen and talk back incessantly. You threaten them that if they misbehave one more time you will take away their smartphones for a week. This isn't the first time you've made this threat. You know that taking their smartphones away will make you as miserable as it will make them but this time you have had it up to here (Imagine me pointing to the top of my head)! This scenario, the players, the strategies and the payoffs are described in the extensive form game below. What is the equilibrium outcome of this strategic interaction assuming everyone plays rationally? 1, 0 Punish You Behave Don't Punish 2, 3 Kids Misbehave 0, 1 Punish You Don't Punish 3, 2 Part D (1 mark) What are the equilibrium payoffs for the two players in the game in Part C? Part E (1 mark) What is the name of the solution method used in finding the equilibrium of the game in Part C? Part F (1 mark) Given the extensive form game shown above, can you comment on the game. Succinctly, either describe the specific nature of the problem faced by the parent, or possibly give some related and relevant parenting advice. This should only involve one sentence. Don't write a paragraph. Use only the space provided. Quality over quantity