Question: Use the Resource Sheet for Test #2 to help you fill in the 10 blanks for this question. Imagine a planet with only two countries,

 Use the Resource Sheet for Test #2 to help you fillin the 10 blanks for this question. Imagine a planet with only

Use the Resource Sheet for Test #2 to help you fill in the 10 blanks for this question. Imagine a planet with only two countries, call the A & B. Suppose that each country as the productive capacity to produce $1,000 of consumer goods per period. Additionally, each country has the technological capability to build nuclear weapons, but such an investment would cost $200. If one country did invest in nuclear armaments while the other did not, it could take half of the other country's stock of consumer goods. If the other country also had a nuclear capacity, it could thwart any threat of invasion, extortion or intimidation. Complete the payoff matrix with the appropriate values and answer the question: Which cell represents the mutually beneficial outcome? Which cell represents the equilibrium outcome? Fill in the values that correspond to each of the following numbers on the Resource Sheet for Test #2: 2- 3 7: 8 Blank #9 Blank #10:Budget = 10 Price =1 Price =1 Total Marginal Total Marginal Widgets |Utility Utility MU/P Zercs Utility Utility MU/P 0 0 0 0 500 100 2 900 2 190 3 1200 3 260 4 1380 4 300 5 1500 320 6 1580 6 330 7 1650 335 8 1700 8 338 CO CO 1720 339 10 1730 10 340

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