Big Pig and Little Pig Have Two Possible Strategies, Press

question 18

Multiple Choice

Big Pig and Little Pig have two possible strategies, Press the Button, and Wait at the Trough.If both pigs choose Wait, both get 4.If both pigs Press the Button, then Big Pig gets 7 and Little Pig gets 3.If Little Pig Presses the Button and Big Pig Waits at the Trough, then Big Pig gets 10 and Little Pig gets 0.Finally, if Big Pig Presses the Button and Little Pig Waits, then Big Pig gets 2 and Little Pig gets 5.In Nash equilibrium,

• A)both pigs will wait at the trough.
• B)Little Pig will get a payoff of zero.
• C)Little Pig will get a payoff of 3 and Big Pig will get a payoff of 7.
• D)Little Pig will get a payoff of 5 and Big Pig will get a payoff of 2.
• E)the pigs must be using mixed strategies.

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Definitions:

Working Capital

The distinction between an organization's immediate assets and liabilities, showing its short-term fiscal well-being and effectiveness in operations.

Plant and Equipment

Long-term tangible assets used in the operation of a business, not intended for sale.

Noncurrent Assets

Long-term assets that are not expected to be converted into cash, sold, or consumed within one year or the operating cycle, including property, plant, and equipment.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of shareholders.