When Both Players in a Game Play a Dominant Strategy,the

question 32

Multiple Choice

When both players in a game play a dominant strategy,the outcome will be

• A) Pareto optimal.
• B) a Prisoners' Dilemma.
• C) a Stackelberg equilibrium.
• D) the game's only Nash equilibrium.

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Definitions:

Gains From Trade

Gains from trade are the benefits that parties obtain from engaging in voluntary exchange, including increased efficiency and access to a greater variety of goods and services.

Economic Models

Simplified representations of complex economic processes, designed to help understand how the economy functions and predict future economic behavior.

Resource Allocation

The process of distributing available resources among various competing needs or uses in order to achieve a desired outcome or optimize efficiency.

Comparative Advantage

An economic theory stating that a country should specialise in producing and exporting goods in which it has a lower opportunity cost than other countries.