Game Theory Is the Tool That Economists Use to Analyze

question 21

Multiple Choice

Game theory is the tool that economists use to analyze strategic behavior,which is behavior that takes into account the ________ behavior of others and the mutual recognition of ________.

• A) unexpected; interdependence
• B) unexpected; independence
• C) expected; interdependence
• D) expected; independence
• E) random; profit

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Definitions:

Externality

An externality is a consequence of an economic activity experienced by unrelated third parties; it can be either positive (beneficial) or negative (harmful).

Exotic Fish

Fish species that are not native to a specific location, often kept in aquariums or introduced to new environments where they can sometimes become invasive.

Common Resources

Natural or man-made resources that are not excludable but are rival in consumption, such as fish in the sea or public parks.

Excludable

A characteristic of a good or service that means it can be prevented from being used by people who have not paid for it.