Scenario: Tom and Harry Are Participating in a Game in Which

question 96

Multiple Choice

Scenario: Tom and Harry are participating in a game in which the participants are divided into groups of two. Tom and Harry have been put in the same group. In each round of the game, Tom will be given an item. Tom can either give it to Harry or pass it on to the next team. If he decides to pass it on to the next team, neither of them will get the prize. If he gives it to Harry, Harry can either pass it on to the next team or sell it himself. If he passes it on to the next team, each of them will get $100. However, if he decides to sell it, he will get an amount higher than $100 and Tom will get nothing.
-Refer to the scenario above.Which of the following will be true if Harry is known to be trustworthy?

• A) Tom and Harry will each receive $100.
• B) The equilibrium outcome will be socially inefficient.
• C) A unique equilibrium will not occur.
• D) Tom and Harry will each receive $50.

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Definitions:

Virtual Memory

A memory management capability of an operating system that uses hardware and software to allow a computer to compensate for physical memory shortages, by temporarily transferring data from random access memory (RAM) to disk storage.

Hard Disk

A non-volatile storage device that uses magnetic storage to save and retrieve digital information using one or more rigid rapidly rotating disks coated with magnetic material.

Device Driver

Software that facilitates the communication between a device and its operating system.

Operating System

The foundational software that manages computer hardware and software resources, and provides common services for computer programs.