3. What is the socially optimal number of trains? a) 0 b) 1 c) 2 d) 3 e) Not enough information How many trains will run if the farmer is granted a property right to be free of sparks? 4. a) 0 b) 1 c) 2 d) 3 e) Depends on transaction costs

Please no written by hand and no emage Two classmates A and B are assigned a group project. Each student can choose to Shirk or Work. If one or more students chooses Work, the project is completed and provides each with credit valued at 4 payoff units each. The cost of completing the project is that 6 total units of effort (measured in payoff units) is divided equally among all players who choose to Work and this is subtracted from their payoff. If both Shirk, they do not have to expend any effort but the project is not completed, giving each a payoff of 0. The instructor can only tell whether the project is completed and cannot determine which students contributed to the project. A. Write down (draw) the normal form game, with payoff in the format of (player A payoff, player B payoff). Note that we assume students choose to Shirk or Work simultaneously. B. Does either player have a dominant strategy? C. Find the Nash equilibrium or equilibria. D. Explain ‘Prisoners’ dilemma’ using the…

1

Asap

7

Last answer was incorrect.

7) Manager B Effort Level Chance of success Cost of effort High Effort 0.6 100,000 Routine Effort 0.5 60,000 What is the minimum bonus that will entice high effort?   1. 40,000   2. 260,000   3. 300,000   4. 400,000   5. 520,000   6. 60,000   7. 100,000   8. 0 6) Manager A Effort Level Chance of success Cost of effort High Effort 0.6 300,000 Routine Effort 0.5 260,000 What is the minimum bonus that will entice high effort?   1. 40,000   2. 260,000   3. 300,000   4. 400,000   5. 520,000   6. 60,000   7. 100,000   8. 0 5) ABC Instrument, a manufacturer of precise scientific instruments, relies heavily on the efforts of its local salespeople. Selling an instrument requires either luck, high effort, or some combination of the two. A salesperson who chooses to work hard has a 40 percent chance of selling an instrument in a given year while a salesperson who chooses…