Question: V2. 1. Consider the 2x2 matrix attached to this question, which depicts payoffs from a two-player game played by two firms. Each firm seeks to

V2. 1. Consider the 2x2 matrix attached to this question, which depicts payoffs from a two-player game played by two firms. Each firm seeks to maximize its payoffs. One firm - the "row" firm - chooses either A or B, while the other firm - the "column" firm - chooses a or b. The payoffs in the lower left corner of each box belong to the "row" firm, while the payoffs in the upper right corner of each box belong to the "column" form.

Suppose that the row firm has selected action "B". What is the best response to this action by the column firm? Enter a single lower case or capital letter.

2. In his research, Coase emphasized the role of __ in creating externality problems.

a. Pollution

b. Environmental Regulation

c. Lack of definition of property rights

d. Immoral firm behavior

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