Suppose Two Firms Are in a Game Situation, and They

question 257

Multiple Choice

Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price. Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect

• A) one of the firms to select a high price and the other a low price.
• B) one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period.
• C) both to select high prices.
• D) both to select low prices.

Understand the role of genetic mutations and engineering in evolution and species diversity.

Recognize the factors contributing to biodiversity and its consequences.

Distinguish between background extinction, mass extinction, and human-caused extinction rates.

Identify the processes and significance of transgenic organism creation.

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