question 1:

Statement 1: "In the game of chicken described in class, there are two Nash equilibria in pure strategies. The

two players will care deeply about which one occurs."

Statement 2: "If the game of chicken is repeated, there is some incentive for both players to establish a

reputation for going for broke."

a.Both are true

b.Both are false

c.Statement 1 is true, but 2 is false

d.Statement 2 is true, but 1 is false

Question 2 :

In 1999 Wal-Mart decided to greatly expand its on-line sales through Walmart.com. When its executive

thought about reasons that the website might create unusually high accounting profits for a fairly long time,

which of the following stories was most persuasive?

a.The website would allow customers to shop from home

b.The website would use the latest, greatest technical tricks

c.The website would deliver bulky objects like refrigerators using Walmart's existing

shipping network when their competitors would be limited to the US mail, UPS and Fed Ex.

d.None of the above ideas would lead to unusually high accounting profits over several years.

question3:

Statement 1: "According to economists, people are selfish. If we follow their models, nobody would ever

give to charitable causes."

Statement 2: "Our company gave all its employees a big bonus last year and productivity stayed the same.

This proves that the economist's view of behavior doesn't work."

A. Both statements are true

b.Both statements are false

c.Statement 1 is true, but 2 is false

d.Statement 2 is true, but 1 is false