-The Above Figure Shows the Payoff Matrix for Two Firms

question 38

Multiple Choice

-The above figure shows the payoff matrix for two firms.A chemical firm must choose between a low level of production which yields one ton of pollution into a nearby lake and a high level of production which yields two tons of pollution into the nearby lake.A private beach on the lake must decide whether to operate or not.Increased pollution reduces the number of people who wish to visit the beach.Joint profits are maximized when

• A) the beach shuts down and the chemical firm produces 1 ton of pollution.
• B) the beach shuts down and the chemical firm produces 2 tons of pollution.
• C) the beach operates and the chemical firm produces 1 ton of pollution.
• D) the beach operates and the chemical firm produces 2 tons of pollution.

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Definitions:

Biased Opinion

A preference or inclination that precludes an impartial judgment, often resulting from preconceived notions or prejudices.

Nonsampling Error

Errors not related to the act of selecting a sample from the population, such as measurement and processing errors.

Incorrect Responses

Answers or replies that do not accurately address the question or problem posed.

Target Population

The total group of individuals or items to which researchers intend to generalize the results of their study.