micro final questions

generally the coase theorem implies that the initial allocation of a property right: a. determines all aspects of the final outcome of teh negotiated agreement b. does not determine which person will be entitled to engage in the externality of generating activity, but does determine which person will receive compensation c. determines which person will be entitled to engage in teh externality generating activity but does not affect which person will receive compensation d. must be assigned to the person with the greatest costs.

b. does not determine which person will be entitled to engage in the externality of generating activity, but does determine which person will receive compensation

when some fraction of the benefit of an activity is received by people not participating in the activity it is called a(n) a. winners curse b. positive externality c. external cost d. efficient allocation

b. positive externality

in the nash equilibrium of a prisoner's dilemma game: a. there is no cash left on the table b. there is unrealized opportunity for both to gain c. total economic surplus is maximized d. both players have equal payoffs

b. there is unrealized opportunity for both to gain.

in the case of either a positive or negative externality, it will always be true that, relative to the social optimum: a. the market price will be too low b. the market price will be too high c. the market price will send an inaccurate signal of true cost or benefit d. the quantity provided by the market will be too large

c. the market price will send an inaccurate signal of true cost or benefit

in a sequential games, the player who moves first: a. always has a first mover advantage b. has a first mover advantage only when he or she is able to make a credible threat or promise to choose a dominated strategy c. has a first mover advantage only when the second mover fails to choose the dominant strategy. d. sometimes has an advantage and sometimes has a disadvantage

d. sometimes has an advantage and sometimes has a disadvantag

the existence of a negative externality will result in: a. a less than optimal level of production b. a greater than optimal level of production c. prices that are artificially high d. elimination of deadweight loss

b. a greater than optimal level of production

a dominant strategy occurs when: a. one player has a strategy that yields the highest payoff regardless of the other player's choices b. both players have a strategy that yields the highest payoff independent of the others choices c. both players make the same choice d. the payoff is the maximum possible of payoffs in the game

a. one player has a strategy that yields the highest payoff regardless of the other player's choices

the tragedy of the commons refers to the: a. overuse of resources that have no price b. overuse of resources that have no cost c. under production of external benefits d. pollution of our natural resources

a. overuse of resources that have no price