Table 17-7 Two Companies, Wonka and Gekko, Each Decide Whether to Produce

question 168

Multiple Choice

Table 17-7
Two companies, Wonka and Gekko, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits (in millions of dollars) for the two companies.

-Juan Pablo and Zak are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $8,000. If they both advertise on radio, each will earn a profit of $14,000. If neither advertises at all, each will earn a profit of $20,000. If one advertises on TV and other advertises on radio, then the one advertising on TV will earn $12,000 and the other will earn $10,000. If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $22,000 and the other will earn $4,000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $24,000 and the other will earn $8,000. If both follow their dominant strategy, then Juan Pablo will

• A)advertise on TV and earn $8,000.
• B)advertise on radio and earn $14,000.
• C)advertise on TV and earn $22,000.
• D)not advertise and earn $20,000.

Understand and apply basic principles of ratio and proportion.

Simplify complex ratios to their lowest terms.

Calculate the value of variables within proportional relationships.

Understand the concept of the Consumer Price Index (CPI) and its calculation.

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Definitions:

Counselor

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The act of revealing experiences of sexual harm or exploitation, often in a safe and supportive environment.

Documented Reasons

Refer to recorded reasons or rationale, often used in contexts where explanations for decisions or actions are meticulously kept for documentation or evidence.

Overwhelming Guilt

An intense feeling of responsibility or remorse for a perceived or real wrongdoing, which can significantly impact mental health.