Alice and Betsy Are Playing a Game in Which Each

question 20

Multiple Choice

Alice and Betsy are playing a game in which each can play either of two strategies, leave or stay.If both play the strategy leave, then each gets a payoff of $200.If both play the strategy stay, then each gets a payoff of $800.If one plays stay and the other plays leave, then the one who plays stay gets a payoff of $C and the one who plays leave gets a payoff of $D.When is the outcome where both play leave a Nash equilibrium?

• A)When D > C and C > $200.
• B)Never, since $800 > $200.
• C)Whenever D < $800.
• D)When $200 > C and D > $800 but not when $800 > D.
• E)Whenever $200 > C.

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Definitions:

Activity-based Costing

A costing method that identifies the activities that a firm performs and then assigns indirect costs to products based on each product's use of those activities.

Activity Cost Pools

Groupings of individual costs related to a particular activity, used in activity-based costing to allocate costs more accurately.

Direct Labor-hours

The overall hours that workers, who are a part of the manufacturing operations, put in.

Activity-based Costing

A costing method that allocates overhead costs to products based on the activities required to produce those products.