Quiz_140 - 45 A B C

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45) Economists use game theory to analyze oligopolies becauseA) game theory helps us to understand why interactions among firms are crucial in determiningprofitable business strategies.B) real markets are too complicated to analyze without using games.C) game theory is useful in understanding the actions of firms that are price takers.D) it is more enjoyable for economists and students to learn by playing games.Answer: A45)Diff: 1Page Ref: 463/463Topic: Game TheoryLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking46) In game theory, the three key characteristics of a game are46)Diff: 1Page Ref: 463/463Topic: Game TheoryLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking47) All games share three characteristics. Two of these characteristics are rule and strategies. What isthe third characteristic called?47)Diff: 2Page Ref: 463/463Topic: Game TheoryLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking12
Table 14-1Alistair Luggage and Baine Baggage are the only firms selling luggage in the upscale town of Montecito. Each firm mustdecide on whether to increase its advertising spending to compete for customers. If one firm increases its advertising budgetbut the other does not, then the firm with the higher advertising budget will increase its profit. Table 14-

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