Questions from General Economics

Q: Compute the new values for the following changes: /

Compute the new values for the following changes:

Q: Suppose the price of an MP3 player decreases from $60 to

Suppose the price of an MP3 player decreases from $60 to $40. Using the midpoint approach, the percentage change in price is _________. Using the initial-value approach, the percentage change in price...

Q: Let i be a mixed strategy of player i that puts

Let i be a mixed strategy of player i that puts positive weight on one strictly dominated pure strategy. Show that there exists a mixed strategy ’i that puts no weight on any dominated pure strategy...

Q: Playing it safe: Consider the following dynamic game: Player 1

Playing it safe: Consider the following dynamic game: Player 1 can choose to play it safe (denote this choice by S), in which case both he and player 2 get a payoff of 3 each, or he can...

Q: The Tax Man: A citizen (player 1) must choose

The Tax Man: A citizen (player 1) must choose whether or not to file taxes honestly or whether to cheat. The tax man (player 2) decides how much effort to invest in auditing and can choose  ∈ [0, 1],...

Q: Agenda Setting: An agenda-setting game is described as follows

Agenda Setting: An agenda-setting game is described as follows. The “issue space” (set of possible policies) is an interval X = [0, 5]. An Agenda Setter (player 1) proposes an alternative x ∈ X agains...

Q: Hyperbolic Discounting: Consider the three period example of a player with

Hyperbolic Discounting: Consider the three period example of a player with hyperbolic discounting described in section 8.3.4 with ln(x) utility in each of the three periods and with discount factors 0...

Q: The Industry Leader: Three oligopolists operate in a market with inverse

The Industry Leader: Three oligopolists operate in a market with inverse demand given by P (Q) = a−Q, where Q = q1+q2+q3, and qi is the quantity produced by firm i. Each firm has a constant marginal c...

Q: The Value of Commitment: Consider the three period example of a

The Value of Commitment: Consider the three period example of a player with hyperbolic discounting described in section 8.3.4 with ln(x) utility in each of the three periods and with discount factors...

Q: Investment in the Future: Consider two firms that play a Cournot

Investment in the Future: Consider two firms that play a Cournot competition game with demand p = 100 − q, and costs for each firm given by ci (qi) = 10qi. Imagine that before the two firms play the C...