1. Income distribution in a certain economy is given by a cumulative probability distribution F. Suppose a policy is enacted such that the new distribution of income is given by G. It was then seen that the mean of the log of income went up. That is, Zlog(x)g(x)dx >Zlog(x)f (x)dx: a. The above inequality shows that Average Poverty Gap has fallen. b. The above inequality shows that Average Poverty Gap must rise. c. Not enough information to conclude either of the above

2. Let s = (s1*, s2*) be a (pure strategy) Nash Equilibrium of a certain two player strategic form game G. Pick the right answer(s) a. s* is a Pareto Optimal outcome of G . b. s* is not necessarily the unique Nash Equilibrium G. c. If s^ = (s^1; s^2) is a strategy profile at which at least both players receives a strictly higher payoff than at s, then s1=/ s^1 and s2 = s^2. d. s* is also IEDS.

3. In the Second Price Auction, a. Each player has a weakly dominant strategy. b. Only the player with the highest valuation has a weakly dominant strategy. c. Each player has a strongly dominant strategy. d. None of the above.