15. If the payoff to the United States to pursuing nuclear weapons is 100 if the

Question

15. If the payoff to the United States to pursuing nuclear weapons is 100 if the USSR does not pursue nuclear weapons and 50 if they do, and the payoff to the USSR to pursuing nuclear weapons is 80 if the USA doesn't pursue nuclear weapons and 30 if they do, what is the non-cooperative equilibrium? A) The USA does not pursue nuclear weapons, the USSR does not pursue nuclear weapons. B) The USA does not pursue nuclear weapons, the USSR does pursue nuclear weapons C) The USA pursues nuclear weapons, the USSR pursues nuclear weapons D) The USA pursues nuclear weapons, the USSR does not 16. What is the primary difference between a mixed strategy and a pure strategy? A) Pure strategies are always dominated strategie:s B) Mixed strategies call for randomizing over possible actions, pure strategies do not C) Mixed strategies are not optimal whereas pure strategies are D) Pure strategies are much more common than mixed strategies 17. Suppose the marginal product of labor equals 1/L. If the wage is $1 per unit of labor, what is the short-run effect on a competitive firm's labor demand if the price of output were to double? A) The firm will demand half as much labor B) The firm will demand twice as much labor C) The firm will demand the same quantity of labor D) There is not enough information to determine the answer 18. If a competitive firm faces a competitive labor market, it will hire labor until A)w=p C) w= MPL * p D) MPL-0 19. A monopoly's demand curve for labor A) is below that of a competitive market B) is the same as that of a competitive market C) is above that of a competitive market D) equals p MPL 20. In the short run, a competitive firm has a marginal product of labor, MPL = 6L-08 The output price is $20 per unit and the wage is $7 per hour. The short-run labor demand curve for the firm is

Explanation / Answer

15> c

Reason

In non-cooperation, it is for their self-interest to pursue nuclear technology.

16> b

Reason

Mixed strategies have probabilistic distribution over pure strategies.

17> B

It should hire more labor as the price of output has gone up.

18> C

The wage should equal to MPL times p.

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