A Nash Equilibrium

question 58

Multiple Choice

A Nash equilibrium:

• A) is reached when all players choose the best strategy they can, given the choices of all other players.
• B) is a point in a game when no player has an incentive to change his or her strategy, given what the other players are doing.
• C) is a stable outcome of a game.
• D) All of these statements are true.

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Definitions:

Opportunity Cost

The highest valued alternative that must be sacrificed as a result of choosing an option.

Economic Losses

The decrease in wealth or resources experienced by an individual, organization, or country, typically measured by cost incurred that are not offset by gains.

Value of Resources

The worth placed on natural, human, and capital assets based on their utility in producing goods and services.

Long Run

A period of time in economic analysis where all factors of production and costs are variable, allowing for full adjustment to change.