Will and Grace Have Adjoining Unfenced Back Yards and Each

question 119

Multiple Choice

Will and Grace have adjoining unfenced back yards and each has just adopted a new puppy.Will values a fence between their yards at $250 and Grace values a fence between their yards at $200.The value of the effort required to build the fence is $300,which will be split equally if they both help build the fence.If one of the neighbors begins building the fence the other might or might not come over to help.Therefore,their payoff matrix is $\begin{array}{c}\quad\quad\quad\quad\quad\quad\text { Will }\\\text { Grace }\begin{array}{|c|c|c|}\hline& \text { Build } & \text { Not Build } \\\hline \text { Build } &\text { Grace: } \$ 50 ; \text { Will: } \$ 100 & \text { Grace: }-\$ 100 ; \text { Will: } \$ 250 \\\hline \text { Not Build } & \text { Grace: } \$ 200 ; \text { Will: }-\$ 50 & \text { Grace: 0; Will: } 0 \\\hline\end{array}\end{array}$
This game is a(n) _____ because

• A) tragedy of the commons;the backyard is treated as a common area by the puppies.
• B) prisoners' dilemma;following dominant strategies leads to a non-optimal result.
• C) example of logrolling;both neighbors need to cooperate to provide the good.
• D) inequitable situation;Grace does not value a fence as highly as does Will.

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Definitions:

Inventory

The raw materials, work-in-process goods, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

LIFO Conformity Rule

A requirement for companies using the Last In, First Out (LIFO) method for tax reporting to also use it for financial reporting to shareholders.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a certain period, indicating the efficiency of inventory management.

Perpetual Inventory System

An inventory management approach where updates to inventory records are made in real-time following each transaction or event.