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242s01x3

# 242s01x3 - ECONOMICS 242 FINAL EXAM SPRING 2001 PLEDGE NAME...

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ECONOMICS 242 FINAL EXAM SPRING 2001 PLEDGE:____________________________ NAME:______________________________ Multiple Choice Questions: 3 points each (48 points total) 1. Suppose that a rich uncle promised to give you \$10,000 in ten years. He writes out this promise on a piece of paper. Your uncle is a well-known and well-respected individual, whose credit is accepted anywhere in town. You’re broke and want to buy some Pokemon trading cards on Ebay, so you decide to sell the promise to the bank. If the interest rate is 10%, the bank should be willing to give you _____ for a promise of \$10,000 ten years into the future. a. \$1000.00 b. \$2550.54 c. \$3855.43 d. \$6139.13 e. \$10,000.00 2. If your uncle promised to give you \$10,000 each year till the end of time and the interest rate stayed the same, how much would the promise be worth today? 3. Every game has three elements. These are: a. Players, rules, and profits. b. Nash equilbria, dominant strategies, and mixed strategies. c. Players, dominant strategies, and backwards induced equilibria. d. Players, strategies, and payoffs. 4. If you are playing an infinitely repeated prisoner’s dilemma game, then:

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5. If both players in a simultaneous move game are playing their dominant strategies, then
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242s01x3 - ECONOMICS 242 FINAL EXAM SPRING 2001 PLEDGE NAME...

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