2010 PracticeMT2KEY - University of Victoria Economics 112...

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Economics 112 Midterm 2 Practice Questions Choose the best answer for each of the following questions. Mark your answer on the answer form provided. 1. A player who chooses strategies based on expected value will a. Never choose a strategy with any risk. b. Always choose the strategy with the highest probability of winning. c. Ignore uncertainty and consider only average payoffs. d. Always earn lower returns than a player who chooses according to expected utility. 2. Consider the following gamble. Two dice are tossed and you win if the total number of dots showing is an even number less than 10 . What is the probability that you win a. 7/18 b. 17/36 c. 1/2 d. Not enough information is given to decide 3. The term “expected utility” refers to a. Another name for expected value b. A theory about how players evaluate uncertain outcomes c. The payoff a player expects from winning a game d. The most likely outcome of a game 4. Consider a gamble that pays $1 if a fair coin toss comes up heads and pays $2 if it comes up tails. A risk neutral person would agree to purchase this lottery for any price a. Less than or equal to $1 b. Less than or equal to $1.50 c. Less than or equal to $2 d. It depends on the person’s preferences for money 5. In a mixed strategy Nash Equilibrium, a. Players must be indifferent between any strategies they might play. b. Players must choose probabilities in a way that makes the other players indifferent between any strategies they might be called on the play. c. The actual outcome of the game is uncertain once players have chosen their strategies. d.
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This note was uploaded on 01/28/2011 for the course ECON 112 taught by Professor Notsure during the Winter '08 term at University of Victoria.

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2010 PracticeMT2KEY - University of Victoria Economics 112...

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