5. Business Economics

Game Theory — Quiz

Test your understanding of game theory with 5 practice questions.

Practice Questions

Question 1

Which concept in game theory describes a player's strategy that maximizes their payoff given the other players' strategies?

Question 2

Which term describes a strategy that yields a lower payoff than another strategy for every possible set of opponents' actions?

Question 3

Given the inverse demand curve $P=120-Q$ where $Q=q_{1}+q_{2}$ and constant marginal cost $c=10$, if Firm 2 produces $q_{2}=20$, what is Firm 1’s profit-maximizing output $q_{1}$ in a Cournot duopoly?

Question 4

Consider the zero-sum matching pennies game where if both players choose the same face (Heads or Tails), the row player gains 1, and if they differ, the row player loses 1. What probability $q$ of choosing Heads makes the row player indifferent?

Question 5

Which statement correctly distinguishes a pure strategy from a mixed strategy?