Question 1

Which of the following best describes the process of optimization using total value?

Accepted Answer

Calculating the total value of each feasible option and picking the one with the highest total value.

Question 2

Suppose you are deciding how many hours to spend watching videos on your tablet. The net benefit for 2 hours is $$30$$, for 3 hours is $$25$$, and for 4 hours is $$0. $$According to optimization using total value, how many hours should you spend?

Accepted Answer

2 hours

Question 3

In marginal analysis, what is the condition for choosing the optimal option?

Accepted Answer

Marginal Benefit = Marginal Cost

Question 4

Which of the following is NOT a reason why an economic agent might fail to make the best choice, even when optimizing?

Accepted Answer

Having perfect information

Question 5

Game theory is most useful for analyzing which type of economic problem?

Accepted Answer

Multi-person decision problems where payoffs are interdependent

Question 6

Which of the following statements about Nash equilibrium is correct?

Accepted Answer

Each player chooses a strategy that is a best response to the equilibrium strategies of the other players.

Question 7

In the context of the prisoners’ dilemma, what is the main reason both players might choose to 'defect' (fink) rather than 'cooperate' (mum)?

Accepted Answer

Because each player's best response is to defect, given the other player's strategy.

Question 8

Given the marginal revenue equation $$MR = 28 - Q$$ and marginal cost equation $$MC = 4 + Q$$, what is the profit-maximizing quantity $$Q^*$$?

Accepted Answer

$$Q^* = 24$$

Question 9

If a firm is currently producing 2 units, and the marginal revenue for the third unit is $$MR = 25$$ while the marginal cost is $$MC = 7$$, should the firm increase production to 3 units?

Accepted Answer

Yes, because $$MR \u003e MC.$$

Question 10

Which of the following is a real-world example of a zero-sum game?

Accepted Answer

Rock-paper-scissors

Question 11

In the optimization application for a new tablet, the net benefit for 3 hours is $$40$$ and for 4 hours is $$25. $$What is the optimal number of hours to spend, using total value analysis?

Accepted Answer

3 hours

Question 12

Which of the following is NOT a step in formalizing a game in game theory?

Accepted Answer

Calculating the net benefit for each player

Question 13

In rock-paper-scissors, what is the payoff for both players if both choose 'rock'?

Accepted Answer

Alex: 0, Betty: 0

Question 14

Zero-sum thinking in economics can lead to which of the following misconceptions?

Accepted Answer

Ignoring the possibility of mutual gains from trade

Question 15

Suppose the mean of the data set $$8, 11, 6, 14, x, 13 is$$ $$11. $$What is the value of $$x$$?

Accepted Answer

$$x = 14$$

Question 16

Which of the following is true about the relationship between optimization using total value and marginal analysis?

Accepted Answer

Both techniques yield identical answers when applied correctly.

Question 17

In the context of the tariff game, what does the Nash equilibrium represent?

Accepted Answer

The outcome where each country chooses its best response given the other country's strategy.

Question 18

Which of the following is NOT an application of game theory mentioned in the study materials?

Accepted Answer

Calculating the mean of a data set

Question 19

If the marginal benefit of an additional hour spent on homework is $$20$$ and the marginal cost is $$25$$, what should you do according to marginal analysis?

Accepted Answer

Decrease the number of hours spent on homework.

Question 20

Which of the following best describes the principle of optimization at the margin?

Accepted Answer

If an option is the best choice, moving toward it makes you better off and moving away from it makes you worse off.

Optimization, Marginal Analysis, and Game Theory in Microeconomics

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