In Which of the Following Games Is It Clearly the Case

question 63

Multiple Choice

In which of the following games is it clearly the case that the cooperative outcome of the game is good for the two players and bad for society?

• A) Two oil companies own adjacent oil fields over a common pool of oil, and each company decides whether to drill one well or two wells.
• B) Two airlines dominate air travel between City A and City B, and each airline decides whether to charge "high" airfare or a "low" airfare on flights between those two cities.
• C) Two superpowers decide whether to build new weapons or to disarm.
• D) In all of the above cases, the cooperative outcome of the game is good for the two players and bad for society

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Definitions:

Government Programs

Initiatives and services provided by the government, funded by government revenue, to meet public needs.

Import Quota

A government-imposed limit on the quantity or value of a particular product that can be imported into a country over a specified time period.

Foreign Firms

Businesses that operate in a country other than where their original headquarters are located.

Revenue Decrease

A decline in the amount of money received from sales or services over a certain period.