Dell and HP must both simultaneously set prices for their new laptops. They can both either choose to set a Low or High price. The payoffs are as follows. If both firms set a Low price, Dell gets 5 and HP 6. If both firms set a High price, the payoffs are 7 to Dell and 8 to HP. If Dell sets a High price and HP chooses Low, the payoffs are 3 to Dell and 10 to HP. If Dell sets a Low price and HP opts for High, the payoffs are 9 to Dell and 1 to HP. Which statement is true?Group of answer choicesEach player has a dominant strategy to choose High; the dominant strategy equilibrium outcome is not a prisoners’ dilemmaIn the outcome of this game HP gets 6None of the other answers are correct.Each player has a dominant strategy to choose High; the dominant strategy equilibrium outcome is a prisoners’ dilemmaIn the outcome of this game Dell gets 7

Dell and HP must both simultaneously prices for their new laptops. They can both either choose to set a Low or High price. The payoffs are as follows. If both firms set a Low price, Dell gets 5 and HP 6. If both firms set a High price, the payoffs are 7 to Dell and 8 to HP. If Dell sets a High price and HP chooses Low, the payoffs are 3 to Dell and 10 to HP. If Dell sets a Low price and HP opts for High, the payoffs are 9 to Dell and 1 to H. What is the total payoff for both Dell and HP in the Nash equilibrium in the first period if the two firms compete for three periods?

Dell and HP have to simultaneously choose the processor in their new laptops, P1 or P2.  If both firms choose P1, each gets profit of 50. If both firms opt for P2, each gets 30. If one firm opts for P1 and the other P2, both firms get 0. Which statement is true?Group of answer choicesThe Nash equilibria are (P1, P1) and (P2, P2); this is an example of minimal product differentiation.The Nash equilibrium is (P1, P2); this is an example of maximal product differentiation.The Nash equilibria are (P1, P2) and (P2, P1); this is an example of maximal product differentiation.The Nash equilibrium is (P2, P2); this is an example of minimal product differentiation.None of the above.

Consider a pricing game between Coles and Woolworths. Each firm simultaneously chooses whether to price High or Low. If both firms price Low, the payoffs are 8 to Coles and 2 to Woolworths. If both firms choose High, the payoffs are 3 to Coles and 7 to Woolworths. If Coles opts for Low and Woolworths High, Coles gets 5 and Woolworths 4. Finally, if Coles plays High and Woolworths Low, Coles gets 7 and Woolworths receives a payoff of 6. Which statement is true?Group of answer choicesthe outcome of the game is (Low, High), where Coles if playing the first strategy Low and Woolworths High; this game is a prisoners’ dilemmathe outcome of the game is (High, Low); this game is a prisoners’ dilemmathe outcome of the game is (Low, Low); this game is not a prisoners’ dilemmathe outcome of the game is (High, High); this game is a prisoners’ dilemmathe outcome of the game is (High, High); this game is not a prisoners’ dilemma

Consider a consumer who can buy good 1 or 2. The price of good 1 is $5 and the price for good 2 is $4. The consumer has income of 60. She buys 12 units of good 2. The consumer wants to also purchase 2 units of good 1. Which statement is true?Group of answer choicesThis is feasible, as the consumer is inside her budget setThis is outside the consumer’s budget set – it is unaffordableThis is affordable – the consumer would be consuming on her budget constraintall of the abovenone of the above PreviousNext

Saudi Arabia and Russia simultaneously must decide their oil production for the next quarter. Both countries can either choose High or Low output. If both opt for High, Russia gets a payoff of 5 and Saudi Arabia 7. If Russia opts of Low and Saudi Arabia High, the payoffs are 2 for Russia and 11 for Saudi Arabia. If Russia chooses High and its Saudi rival Low, the payoffs are 8 for Russia and 3 for Saudi Arabia. Finally, if both opt for Low, the payoffs are 6 and 9 to Russia and Saudi Arabia, respectively. Which statement is FALSE?Group of answer choicesThis game is a version of the prisoners’ dilemma.Saudi Arabia has a dominant strategy to play H.The Nash equilibrium is (H, H); the dominant strategy equilibrium is (H, H)Russia has a dominant strategy to play H.The Nash equilibrium is (H, H); the dominant strategy equilibrium is (L, L)