Question 1 (1 point)

Suppose that there are three students in a class competing for a grade of A. The way the class is curved, there is only one A is awarded in the class, and the other two students receive a C. An A is worth $10,000 in future lifetime earnings and a C is worth $0. Each player exerts some effort by studying. Studying carries a cost of $2,000 per day. Each player's probability of winning the prize is proportional to the effort exerted. For example, if student 1 studies twice as much as student 2, student 1 has twice the chance of getting an A as student 2.

Which of the following is true?

Question 1 options:

	There is no equilibrium to this game
	There is an equilibrium in which each student studies for one day
	There is an equilibrium in which each student studies for two days
	There is an equilibium in which students do not study at all.

Question 2 (1 point)

In contest games like those described in Chapter 12, experiments show that people on average choose

Question 2 options:

	more effort than the equilibrium level
	about the same effort as the equilibrium
	less effort than the equilibrium level
	no effort at all

Question 3 (1 point)

Suppose that 10 competitors are training for a track meet. Each day of training costs the competitors $200 in foregone earnings. The prize for winning the meet is $20,000. Players' probability of winning the meet is proportional to the amount they train, so that if person 1 trains for twice as many days as person 2, they have twice the change of winning.

There is an equilibrium in which all competitors train for

Question 3 options:

	9 days
	10 days
	12 days
	20 days

Question 4 (1 point)

Refer to question #3. Based on the results from experiments, would you expect the average contestants to train

Question 4 options:

	Less than the equilibrium level?
	About at the equilibrium level?
	More than the equilibrium level?
	Not at all?

Question 5 (1 point)

The US Federal Communications Commission has been auctioning off bandwith. The auctions have raised

Question 5 options:

	More than 1 trillion dollars
	More than 100 billion dollars
	Between 1 billion and 50 billion dollars
	600 dollars

Question 6 (1 point)

An increase in costs tends to

Question 6 options:

	raise the total amount spent on rent seeking
	lower the total amount spent on rent seeking
	not affect the total amount spent on rent seeking