b If neither you nor your classmate knows how much work the other person is doing , what is the likely outcome ? Does it matter whether you are likely to work with this person again? Explain your answer. 7 The chapter states that the ban on cigarette advertising on television increased the profits of cigarette companies. Could the ban still be good public policy? Explain your answer. 8 Farm erJones and Farmer Smith graze their cattle on the same field. If there are 20 cows grazing in the field, each cow produces $4000 of milk over its lifetime .If there are more cows in the field , then each cow can eat less grass and its milk production falls . With 30 cows on the field , each produces $3000 of milk ; with 40 cows , each produces $2000 of milk . Cows cost $1000 each. a Assume that FarmerJones and Farmer Smith can each purchase either 10 or 20 cows , but that neither knows how many the other is buying when she makes her purchase .Calculate the pay -offs of each outcome b What is the likely outcome of this game ? What would be the best outcome ?Explain c There used to be more common grazing land than there is today. Why? (For more discussion of this topic, reread chapter 11.) 9 Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price : Euler I.\"- In: Don't Gribr a Does either player in this game have adornment strategy ? b Does your answer to part (a) help you figure out what the other player should do? What is the Nash equilibrium ? ls there only one? c Big Brew threatens Little Kona by saying, 'If you enter, we're going to set a low price , so you had better stay out .' Do you think Little Kona should believe the threat ? Why or why not ? d If the two firms could collude and agree on how to split the total profits , what outcome would they pick