242s01x3 - ECONOMICS 242 FINAL EXAM SPRING 2001 PLEDGE:_...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
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? a. $10,000 b. $100,000 c. $200,000 d. $500,000 e. $1,000,000 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: a. You should always cheat the first opportunity you get. b. You should always cooperate if the other player is playing the tit-for-tat strategy. c. You should always cooperate if the other player is playing the grim strategy. d. Your decision to cheat or cooperate is based on the effective discount rate.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5. If both players in a simultaneous move game are playing their dominant strategies, then a. The game must be a prisoner’s dilemma game. b. The game must be a game of chicken. c.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This test prep was uploaded on 04/22/2008 for the course ECON 242 taught by Professor Nonnenmacher during the Spring '06 term at Allegheny.

Page1 / 8

242s01x3 - ECONOMICS 242 FINAL EXAM SPRING 2001 PLEDGE:_...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online