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Gametheory
9.1What is the difference between a cooperative and a noncooperative game?
Give an example of each. (4)
9.2What is a dominant strategy? Why is an equilibrium stable in dominant
strategies? (4)
9.3Explain the meaning of a Nash equilibrium. How does it differ from an
equilibrium in dominant strategies? (4)
9.4Explain your understanding of the prisoners’ dilemma game and give an
example of a pay-off matrix in this game. (9)
Suppose you are a monopolist and find that the demand elasticity of your product is different in two markets what would be your pricing strategy
Qd1 = 90 – 2P1 + 3P2 – 5P3 ; Qs1 = P1 – 10
Qd2 = 36 + 3P1 – 3P2 + 2P3 ; Qs2 = –14 + P2
Qd3 = 45 – 3P1 + 3P2 – 3P3 ; Qs3 = P3 – 20
a. Determine the equilibrium prices and quantities for the three commodity Market
model.
Problem 1. Suppose we have the following data about a simple economy:
C = 10 + 0.75Yd
I = 50
G = T = 20
(a) Find out the equilibrium level of national income.
(b) What is the size of the multiplier?
Using the World Bank’s World Development Indicators database, https://databank.worldbank.org/home.aspx, a) Complete the following table. 2006 2009 2014 2019* GDP per capita (current) Australia China India U.S. GDP growth rate Australia China India U.S. Inflation rate Australia China India U.S. *or latest available year b) Produce a plot for each variable (GDP, gdp growth, inflation) comparing the four countries. c) What can be inferred with respect to economic growth and price control in each of these economies?
Explain in detail the process of Monetary Policy transmission of an increase in the cash interest rate. Use relevant graphs to describe how a Central Bank’s action on the interest cash rate ripple through the economy and lead to the target policy goal. (Three connected diagrams should be used: (1) money supply and demand (2) investment demand schedule (3) AS/AD diagram. Interest rates is the variable that connects the first and second diagram).
Assume that an economy is initially operating at the natural rate of output (full employment output). Use the AD-AS model to illustrate graphically the effects on price and output of an increase in government spending and a decrease in the cash rate. Explain your assumptions with respect to the range of aggregate supply of your analysis.
a) Give the definition of GDP and explain what items are not included in its calculation? b) How is GDP calculated using the expenditure approach? c) How is GDP calculated using the income approach? d) Explain the problem of "double-counting" and how it can be avoided in calculating GDP
b) Assume that assets and liabilities increased by Br.240,000, and Br. 120,000 respectively
during a given year. Assume the following additional particulars further
▪️ Revenues generated during the year…. Br.80,000
▪️ Additional investment made by the owner during the year ………. Br. 70,000
▪️ Amount withdrawn by the owner during the year…. $10,000
Required: Determine the amount of expense incurred during the year
1) When price of X commodity rises from Br. 10 to 15, demand for
Y commodity declines from 200 to 150.
A) Calculate cross price elasticity.
B) Based on the result, what kind of relation exists between the two goods?
