Question

1. A Nash equilibrium occurs a. when a unilateral move by a participant does not make the participant better off. b. when a unilateral move by a participant makes the participant better off. c. when a unilateral move by a participant does not make the other participant better off. d. when a unilateral move by a participant makes the other participant worse off. 2. Several politicians have proposed a "guzzler" tax that would be added to the cost of few-miles-per-gallon vehicles. If enacted, this tax would most likely a. reduce the equilibrium price. b. increase the equilibrium output. c. increase U.S. dependency on foreign oil supplies. d. shift the supply curve (for automobiles) inward. e. do all of these.

3. A cartel is a. implicit collusion. b. explicit collusion. c. a facilitating practice. d. a merger of firms into a monopoly. e. legal in the United States.

4. In some African countries, the elephant population increased significantly when the government facilitated a. substitution of African elephants for Indian elephants. b. a shift from common ownership to private property rights. c. social regulation of elephant breeding. d. a shift from private ownership to public ownership. e. the creation of a natural monopoly. 5. Which of the following is not one of the classifications of current economic thinking? a. Keynesian economists b. Reaganomists c. Marxists d. free market economists e. All of these were presented as current schools of thought.

Answer 1

1. A Nash equilibrium occurs when the participant has no incentive to deviate from initial strategy or any action will not make the participant better off Hence, option a "when a unilateral action by participantbdoes not make the participant better off" is correct other option does not signifies nash equilibrium, if an individual can have better outcome it is not Equilibrium and they will chose better alternative and aim is to get best outcome for themselves regardless of the outcome for other hence, option c and d are incorrect

2.Guzzler tax will increase the Equilibrium price and decrese the quantity because of inefficiency due to taxation , supply curve for automobile will shift inward as the price will increase for a Quantity supply on account of taxes also tax has nothing to do with us dependency on foreign oil. Hence, option d " shift the supply curve inward "is correct

3. Cartel has formal agreement for collusion hence it is explicit in nnature where as impliy collusion is more indirect or hidden, in US cartel activities are illegal, firms in cartel do not merge with each other Hence, option b "explicit collusion" is correct

4. Private property right categorically help increase innovation and productivity hence in this case with private ownership option b is correct regulation will decrease breeding , substituting with Indian elephant will not increase the breeding or population,also monoy does not means increased Output