-Oscar and Felix Are the Only Firms That Clean Offices

question 235

Multiple Choice

-Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above shows the economic profit that each firm can make. If the game is played only once, then

• A) Felix and Oscar will each make $10 million economic profit.
• B) Felix will comply and Oscar will make $12 million economic profit.
• C) Felix and Oscar will each make $1 million economic profit.
• D) Felix will cheat and Oscar will make -$2 million economic profit.

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Definitions:

Lexical Decision

A psychological task where participants decide as quickly as possible whether a string of letters is a real word or a non-word, used to investigate processes of word recognition.

Thrifty Gene

A hypothesis suggesting that certain genes make individuals more efficient at food intake and storage, historically advantageous during periods of food scarcity but potentially leading to obesity in societies with abundant food.

Predisposed

Having a tendency or inclination to a specific behavior, action, or disease, often due to genetic or environmental factors.

Obesity

A medical condition characterized by excessive body fat that presents a risk to health.