Suppose You Eat at a Restaurant That Serves Clams at a Fixed

question 67

Multiple Choice

Suppose you eat at a restaurant that serves clams at a fixed price and crab legs at a price that varies based on market conditions.Each week, the marginal utility you attach to an order of crab legs is 100, and the marginal utility of an order of clams is 50.One week you have crab legs, but the next week you have clams.This means that

• A)you are irrational
• B)your tastes must have changed
• C)the price of clams dropped below the price of crab legs
• D)the price of crab legs increased
• E)the price of crab legs must have increased to more than twice that of clams

Apply the concept of mixed strategies in games where uncertain outcomes influence player decisions.

Understand the Nash equilibrium concept and its application in strategic decision-making.

Analyze the impact of probability and strategic choices in game outcomes.

Calculate long-run equilibrium conditions in dynamic models.

---

Definitions:

Student Loans

Financial borrowings specifically designed to cover educational expenses, often subject to different terms and conditions than other loan types.

Simple Interest Rates

Interest calculated merely on the foundational sum, leaving out any accumulation.

Payments

The act of transferring money in exchange for goods or services.

Future Payments

Payments that are scheduled to be made at a later date or period, often related to loans or financing arrangements.