Infоrmаtiоn fоr questions 17-20 The following figure shows four isoquаnts for а travel agency that sells summer cruises. Units of labor are on the horizontal axis, and units of capital are on the vertical axis. Each isoquant is labeled with the output that its combinations of labor and capital produce, in number of cruises. Note that each grid spacing is 0.25 units of labor or capital. Also shown are some auxiliary lines in solid black. You can use these as isocost lines, as needed. The two top black lines have slope=2, and the two bottom black lines have slope=1 (all of these slopes are in absolute value). Note that each of the auxiliary lines is tangent to an isoquant, and that its tangency point is marked with a dot. Only the exact answers are accepted. For that purpose, adopt the convention: if a line seems to cross a grid point, assume that it does so exactly. Also, assume that the four dots are exactly at a grid intersection. For example, the lower, green, dot lies at point (L=0.75, K=1.25), exactly. Enter 0, if the answer cannot be obtained with the information given. Suppose that the wage is 20 and rental price is 10. Which of the following would be on the firm’s expansion path?
Infоrmаtiоn fоr questions 35-37 Two plаyers move sequentiаlly in game, as depicted below. First, Player 1 (represented in blue, and in the node labeled “1”), picks among three strategies: Up, Center, or Down. Next, Player 2 (represented in red, and in the nodes labeled “2”), also picks among the same three strategies: Up, Center, or Down. (Note: for ease of reading, Player 2’s labels were omitted where Player 1’s decision is either Center or Down. Obviously they are the same labels as in the case where Player 1 chooses Up.) The game then ends, and the players receive the payoffs as depicted, with the first number being Player 1’s payoff, and the second number Player 2’s payoff. What strategy will Player 2 pick?