Scenario 17-3

question 270

Multiple Choice

Scenario 17-3. Consider two countries, Muria and Zenya, that are engaged in an arms race. Each country must decide whether to build new weapons or to disarm existing weapons. Each country prefers to have more arms than the other because a large arsenal gives it more influence in world affairs. But each country also prefers to live in a world safe from the other country's weapons. The following table shows the possible outcomes for each decision combination. The numbers in each cell represent the country's ranking of the outcome (4 = best outcome, 1 = worst outcome) .

-Refer to Scenario 17-3.Building new weapons is a dominant strategy for

• A) Muria, but not for Zenya.
• B) Zenya, but not for Muria.
• C) both Muria and Zenya.
• D) neither Muria nor Zenya.

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Definitions:

Revenue

The earnings a company garners from its principal operations, often through selling products and services to its clientele.

Supply

The total amount of a particular good or service that is available to consumers at a given price level in a given time period.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price; high elasticity indicates sensitivity to price changes.

Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity of that good or service that suppliers are willing and able to provide.