1			In a prisoner's dilemma with prisoners A and B, if they both confess, A gets 5 years and B gets 8 years. If both remain silent, A gets 2 years and B goes free. If one confesses and the other does not, the one who confesses gets 1 year and the other gets 15 years. Which statement is true of this case?
			A)	There is a dominant strategy for both A and B.
			B)	There is no dominant strategy for either A or B.
			C)	There is a dominant strategy for A but not for B.
			D)	There is a dominant strategy for B but not for A.
2			In baseball games if a pitcher appears to have thrown at an opposing batter it is generally understood that someone on that pitcher's team will be thrown at later in the game. Sometimes bench clearing brawls result, but these incidents happen relatively infrequently over a season. Once each team has made its point the incident is usually forgetten. All of this seems to fit with the oligopoly strategy called
			A)	Prisoner dilemma dominant strategy
			B)	Tit for tat strategy
			C)	Contestable market strategy
			D)	Strategic entry deterrence.

The following three questions relate to the table below. The issue for Boeing and Airbus is whether or not to build a new super jumbo jet that can transport 500 people. The numbers in the boxes represent profits that the firms earn under the four different scenarios proposed. Airbus vs. Boeing & super jets Boeing builds the plane

Airbus vs. Boeing & super jets	Boeing builds the plane	Boeing doesn’t build the plane
Airbus builds the plane	Boeing = 50: Airbus = 50	Boeing = 40: Airbus = 75
Airbus doesn’t build the plane	Boeing = 75: Airbus = 40	Boeing = 55: Airbus = 55

3			Given the data shown above, which of the following is true?
			A)	Boeing and Airbus both have a dominant strategy to build the plane
			B)	Airbus has a dominant strategy to build the plane, but Boeing doesn’t have a dominant strategy.
			C)	Boeing and Airbus both have a dominant strategy not to build the plane.
			D)	Neither firm has a dominant strategy and must decide what to do on some other grounds.
4			If the Airbus profit in the lower middle cell is changed from 40 to 51, then
			A)	Boeing’s strategy changes.
			B)	Airbus has a dominant strategy not to build.
			C)	Airbus has a dominant strategy to build.
			D)	the final outcome has Boeing building and Airbus not building.
5			Which of the following statements is true about the plane building industry described in the two problems above?
			A)	Both firms would likely support a governmental regulation forbidding super planes if the original numbers prevail in the industry.
			B)	There is a Nash equilibrium in the outcomes of both cases presented above.
			C)	If the starting point is the present situation of not building, then the firms would prefer the status quo rather than the building strategy.
			D)	The status quo of not building is not a Nash Equilibrium.
			E)	All of the above are true statements about this industry.
6			In the text the question is asked: Why would firms make investments they hope they will never use? The answer given is that
			A)	firms make bad decisions in the heat of an intense struggle for market share.
			B)	the firms intend to sell the investments to competitors when they find a technology that is superior.
			C)	some investments are designed as signals to competitors to back off from intense competition lest the investment be unleashed as a counter weapon.
			D)	firms assume that technology moves rapidly and firms that adopt new technology early will need to discard some investments before they are used.
7			The prisoners dilemma problem would result in the prisoners going free if
			A)	the prisoners were allowed to discuss their situation before being separately questioned.
			B)	the prisoners would simply tell the truth.
			C)	the prisoners could develop an effective foolproof commitment device.
			D)	each prisoner would follow their self-interest assuming their partner would confess.
8			Irrational behavior or the credible threat of it
			A)	is bound to detract from an optimal outcome for an individual.
			B)	increases the possibility of credible commitments among people.
			C)	can reduce the need to continue the practice of such irrational behavior.
			D)	is what makes the prisoners dilemma outcome plausible.
9			The commitment model’s functional view of preferences
			A)	suggests that the economists repertoire of tastes be expanded beyond the simple egoistic tastes.
			B)	views tastes as means rather than ends
			C)	helps constrain the open ended nature of present aim rationality.
			D)	does all of the above.
10			In the parable of the hawks and the doves, which statement is true?
			A)	The hawk’s share of the population grows more rapidly when they are few in number.
			B)	Doves learn over time to be more aggressive so they survive by beating the hawks at their own game
			C)	The entire society would be worse off if the hawks all adopted dovish behavior.
			D)	From the hawks point of view all doves should be eliminated and from the doves point of view, all hawks should be eliminated.
			E)	None of the above is true.
11			In most cases where cooperation would result in higher payoffs than competing behavior, cooperation fails as a social coordinating principle because
			A)	everyone else is cooperating.
			B)	the trust required to have everyone cooperate is difficult to generate.
			C)	there are very few commitment devices that are foolproof.
			D)	all of the above help explain why competing behavior dominates economic behavior.
			E)	none of the above explain why cooperation fails as a social coordinating mechanism.