Select all the correct answers. Which two sentences describe the characteristics of a corporation? The company is treated as a s
1 answer:
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Answer:
The only dominant strategy in this game is for <u>NICK</u> to choose <u>RIGHT</u>. The outcome reflecting the unique Nash equilibrium in this game is as follows: Nick chooses <u>RIGHT</u> and Rosa chooses <u>RIGHT</u>.
Explanation:
ROSA
left right
4 / 6 /
left 3 4
NICK
right 6 / 7 /
7 6
Rosa does not have a dominant strategy since both expected payoffs are equal:
- if she chooses left, her expected payoff = 3 + 7 = 10
- if she chooses right, her expected payoff = 4 + 6 = 10
Nick has a dominant strategy, if he chooses right, his expected payoff will be higher:
- if he chooses left, his expected payoff = 4 +6 = 10
- if he chooses right, his expected payoff = 6 + 7 = 13
The only possible Nash equilibrium exists if both Rosa and Nick choose right, so that their strategies are the same, resulting in Rosa earning 6 and Nick 7.
Answer:
The correct answer is letter "C": the Macro Islands have a comparative advantage in producing fishing boats, and the Micro Islands have a comparative advantage in producing guava jelly.
Explanation:
Comparative advantage is an advantage an individual, organization or country has to use <em>opportunity costs</em> in their production compared to their competitors. The scenario described above does not imply that the individual, organization or country has an absolute advantage.
In the example proposed:
- Comparative advantage of Macro islands in fishing boats =
- Comparative advantage of Micro islands in fishing boats =
- Comparative advantage of Macro islands in jars =
- Comparative advantage of Micro islands in jars =
Thus, <em>the Macro Islands have a comparative advantage in producing fishing boats, and the Micro Islands have a comparative advantage in producing guava jelly.</em>