Question:

Alice and Bob work on a joint project. The project can either be difficult or easy, which Bob observes before making his choice. Alice, however, only knows that the project is difficult with 0.5 probability and is easy with 0.5 probability. Alice and Bob simultaneously decide whether to exert high effort or not. The cost of low effort is zero and the cost of high effort is 1 for each player. The utility of each player depends on whether the project is successful or not: if the project is successful, each player gets a benefit of 2 before subtracting his/her cost of effort. If the project is unsuccessful, each player gets zero before subtracting his/her cost of effort. If the project is difficult, the project is successful if and only if both agents exert high effort (in other words, it is unsuccessful if at least one agent exerts low effort). If the project is easy, the project is successful if at least one agent exerts high effort (in other words, it is unsuccessful if and only if both agents exert low effort).

(a) Model this problem as a Bayesian game. In your answer provide the payoff matrices.

(b) Solve for all Bayesian-Nash equilibria of this game (in pure and mixed strategies).

A Moving to the next question prevents changes to this answer. Question 20 An increase in government spending, other things constant, will cause a: a. leftward shift of the aggregate supply curve. b. rightward shift of the aggregate supply curve. O c. leftward shift of the aggregate demand curve. O d. downward movement along the aggregate supply cute. O e. rightward shift of the aggregate demand curve. A Moving to the next question prevents changes to this answer. aIS. PLEASE don't stop and hope to return later. Submit All Questions Completed 46 out of 50 uestion 31 of 50 > (Figure: Interpreting Aggregate Shifts) The graph shows: Aggregate Price Level (P) Aggregate Output (C) O a decrease in aggregate demand. O an increase in aggregate quantity supplied. an increase in aggregate demand. O a decrease in aggregate quantity supplied. about us careers privacy policy terms of use conta O e 199+ DELLIf the government of Econia raises the minimum wage, what impact will this have on the average price level and output level of the country? O It will shift the short-run appregate supply carve to the left, leading to a higher price level and lower output. It will shift the short-run aggregate supply curve to the right, leading to a lower price level and higher output O It will shift the short-run aggregate supply curve to the left, leading to a lower price level and higher outpul. O It will shift the short-run aggregate supply curve to the right, leading to a higher price level and lower output D Question 4 5 pts Assume initially the economy is of full employment. If aggregate demand increases, the aggregate price level and cools will - and ultimately, the short run aggregate supply curve shills to the O misc; right O rise; left O fall; right O fall; ken W D Question 5 5 pits The _ curve is positively sloped because some input costs are slow to change. O short-run aggregate supply O long-run aggregate supply O short-run aggregate demand O long-run aggregate demandUnder classical economics, falling wages cause the curve to shift back into equilibrium. O Aggregate Demand Short -run Aggregate Supply Long-run Aggregate Supply O No answer text provided. D Question 21 3.2 pts Under the the theory of the Phillips Curve, Aggregate Supply and Aggregate Demand are directly related. Aggregate Supply and Aggregate Demand are inversely related. Inflation and unemployment are directly related. Inflation and unemployment are inversely related