Econ Unit 4 FA Dummy 2, 2025-26

A strategic choice that is better than all other options, even after considering every possible move by others, is a:

• Nash Equilibrium

• Dominant Strategy

• Rational Expectation

• Strategic Alliance

Which of the following refers to a player's most beneficial move that remains the best option regardless of competitors’ decisions?

• Prisoner’s Dilemma

• Dominant Strategy

• Incentive Structure

• Mixed Strategy

In a two-player game, one player always chooses to advertise because advertising leads to higher profits whether the rival advertises or not. This behavior is based on:

• Variable Cost Advantage

• Nash Equilibrium

• Dominant Strategy

• Consumer Surplus

A study found that when grocery chains compete, one chain always sets a low price because it outperforms other options regardless of rivals’ pricing. This is evidence of:

• Cooperative Equilibrium

• Dominant Strategy

• Strategic Dependency

• Elastic Demand

A mobile phone provider runs the same promotion every quarter because it earns the highest profit regardless of the marketing tactics of its competitors. This strategy is an example of:

• Dominant Strategy

• Comparative Pricing

• Fixed Cost Recovery

• Dynamic Adjustment

Two businesses compete over a limited customer base. One consistently uses next-day shipping, since it's always the most profitable choice no matter what the other company does. This is an example of:

• Dominant Strategy

• Pricing Equilibrium

• Total Revenue Maximization

• Discount Signaling

In a strategic game, a player realizes that using Strategy A always provides a better outcome than Strategy B, regardless of what the other player does. This is most clearly a:

• Dominated Strategy

• Elastic Response

• Dominant Strategy

• Repeated Game

Which of the following scenarios is least likely to involve a Dominant Strategy?

• A player choosing to defect in a prisoner’s dilemma

• A firm setting the same price no matter what rivals charge

• A company adjusting strategy depending on competitor responses

• A student choosing the best test-taking method regardless of question format

What term describes the loss of economic efficiency when the quantity of a good traded is less than the market equilibrium level?

• Price Ceiling

• Deadweight Loss

• Consumer Surplus

• Market Power

Deadweight Loss is best defined as:

• The added benefit to consumers from lower prices

• The tax revenue collected by the government

• The loss of total surplus from not producing at equilibrium

• The excess supply created by a surplus