In a Decision Tree, the Difference Between a Decision Node

question 153

Multiple Choice

In a decision tree, the difference between a decision node and a terminal node is that

• A)at a decision node all participants are free to make individual decisions but at a terminal node they must agree on a collective decision.
• B)at a decision node all participants make the same decision, while at a terminal node different players may make different decisions.
• C)at a decision node a decision must be made, while a terminal node shows the payoff.
• D)at a decision node a decision must be made, while at a terminal node the final decision must be made.

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or service is not achieved or is unachievable.

Tariff Revenue

The income generated by a government from imposing taxes on imported goods.

World Price

The global market price of a product or service, determined by worldwide supply and demand factors.

Domestic Price

The price of goods or services within a specific country, unaffected by international trade or exchange rates.