2/21/25, 12:43 PM HW2: Homework Assignment for Module 2: Online SP25 ECON 2105 Principles of Macroeconomics
HW2: Homework Assignment for Module 2
Due Feb 17 at 11:59pm
Points 30
Questions 26
Available until May 9 at 11:59pm
Time Limit None
Instructions
Welcome to HW2! This HW contains material from Units 4-7 in your textbook.
Study tip: take note of any questions you miss and revisit those themes during your studying later!
Please note the last question will take a bit more time on your part, you will be asked to practice your data
skills! Make sure to review the videos on how to do graphs in FRED.
Good luck!
Attempt History
Attempt Time Score
LATEST Attempt 1 3,308 minutes 28.67 out of 30
Score for this quiz: 28.67 out of 30
Submitted Feb 17 at 10:32pm
This attempt took 3,308 minutes.
Question 1
1/1 pts
Which of the following is an example of a social dilemma®?
Correct!
Traffic jams due to a sub-optimally high level of car usage.
This is a social dilemma because drivers fail to take into account the effects of their driving on other
drivers.
Dilemmas discussed on social media.
Correct!
Dirty dishes piling up in the kitchen sink of your shared student accommodation.
This is a social dilemma because if you do the washing up then others would be free riding on your effort.
The problem of how to look after the elderly in society.
Question 2
1/1 pts
https://gatech.instructure.com/courses/442722/quizzes/630805 1/16
,2/21/25, 12:43 PM HW2: Homework Assignment for Module 2: Online SP25 ECON 2105 Principles of Macroeconomics
Which of the following are public goods?
Library books.
Correct!
Fresh air.
You cannot stop others from breathing fresh air, and your breathing will not reduce the amount available
to others. Hence fresh air is a public good.
Correct!
Official statistics.
Official statistics are available to all and are non-rival. Hence it is a public good.
Correct!
Streetlights.
Street lights are non-excludable (cannot stop your neighbours from benefitting) and non-rivalrous (your
use does not reduce the light available to your neighbours). Therefore they are a public good.
Question 3
0/1pts
Anthony loves going to the opera while Becky loves watching football. The following diagram shows the
payoffs for their choice of activity. For example if Anthony chooses opera and Becky chooses football,
then the activities are valued at GBP 10 to Anthony and GBP 20 to Becky, respectively. Assume that they
can only choose one activity (i.e. they cannot randomise). Based on this information, which of the
following statements is correct?
Becky
Opera Football
Opera 80, 10 10, 20
Anthony I otball 0,0 20, 40
You Answered
If Anthony offers GBP 50 to Becky for coming to the opera with him, then (Opera, Opera) will definitely be chosen.
With the payoff of (30, 60) for (Opera, Opera), it is now a Nash equilibrium. However, (Football, Football)
remains a Nash equilibrium and therefore without coordination beforehand, there is no certainty that
(Opera, Opera) will be chosen.
There are two Nash equilibria: (Opera, Opera) and (Football, Football).
If Anthony announces that he will choose Opera and sticks to it, then (Opera, Opera) will be chosen.
Correct Answer
If Anthony offers GBP 20 to Becky for coming to the opera with him, then (Opera, Opera) may be chosen.
Question 4
1/1 pts
Alan and Beatrice are students who are suspected of colluding on their assignment. The examiners are
going to interview each of them individually, in separate rooms. The following table shows the payoffs of
Alan and Beatrice, if both were completely selfish, depending on whether each decides to Deny or
Confess. Assume that unless stated otherwise, Alan and Beatrice are completely selfish. In which of the
https://gatech.instructure.com/courses/442722/quizzes/630805 2/16
, 2/21/25, 12:43 PM HW2: Homework Assignment for Module 2: Online SP25 ECON 2105 Principles of Macroeconomics
following cases could the examiners' scheme fail to produce the outcome (Confess, Confess)?
Beatrice
Deny Confess
Deny 45, 50 0,70
Alan Confess 65,0 40, 40
Correct!
Alan and Beatrice manage to communicate using their mobile phones.
This will lead to a possible agreement between the two to deny, which will give them a better outcome
than (Confess, Confess).
Correct!
Alan is so fond of Beatrice that he would never confess that they colluded.
This is the case where Alan places value on the payoff of Beatrice and as such internalises the cost that
his action inflicts on Beatrice. In this particular case, his payoff from confessing becomes so low (possibly
negative) that it would be a dominant strategy to deny. Then the outcome (Confess, Confess) would never
be reached.
If one person continues to deny but then finds out that the other person has confessed, the disappointment is equivalent
to an extra 10 marks off the mark he/she is given.
Alan and Beatrice hate lying.
Question 5
1/1 pts
The following figure depicts possible indifference curves of Alan, whose utility depends on his and/or his
friend Beatrice's levels of consumption. Alan's consumption is along the horizontal axis while Beatrice's
consumption is along the vertical axis. Which of the indifference curves below represent altruistic
preferences?
4 (a)
5
consumption
b
Beatrice's
. (d)
’
’
/\
245
P o
45°N\(
) c)
Alan’'s consumption
Correct!
(d)
Here Alan's utility partly depends on Beatrice's consumption, so he is altruistic.
https://gatech.instructure.com/courses/442722/quizzes/630805 3/16
HW2: Homework Assignment for Module 2
Due Feb 17 at 11:59pm
Points 30
Questions 26
Available until May 9 at 11:59pm
Time Limit None
Instructions
Welcome to HW2! This HW contains material from Units 4-7 in your textbook.
Study tip: take note of any questions you miss and revisit those themes during your studying later!
Please note the last question will take a bit more time on your part, you will be asked to practice your data
skills! Make sure to review the videos on how to do graphs in FRED.
Good luck!
Attempt History
Attempt Time Score
LATEST Attempt 1 3,308 minutes 28.67 out of 30
Score for this quiz: 28.67 out of 30
Submitted Feb 17 at 10:32pm
This attempt took 3,308 minutes.
Question 1
1/1 pts
Which of the following is an example of a social dilemma®?
Correct!
Traffic jams due to a sub-optimally high level of car usage.
This is a social dilemma because drivers fail to take into account the effects of their driving on other
drivers.
Dilemmas discussed on social media.
Correct!
Dirty dishes piling up in the kitchen sink of your shared student accommodation.
This is a social dilemma because if you do the washing up then others would be free riding on your effort.
The problem of how to look after the elderly in society.
Question 2
1/1 pts
https://gatech.instructure.com/courses/442722/quizzes/630805 1/16
,2/21/25, 12:43 PM HW2: Homework Assignment for Module 2: Online SP25 ECON 2105 Principles of Macroeconomics
Which of the following are public goods?
Library books.
Correct!
Fresh air.
You cannot stop others from breathing fresh air, and your breathing will not reduce the amount available
to others. Hence fresh air is a public good.
Correct!
Official statistics.
Official statistics are available to all and are non-rival. Hence it is a public good.
Correct!
Streetlights.
Street lights are non-excludable (cannot stop your neighbours from benefitting) and non-rivalrous (your
use does not reduce the light available to your neighbours). Therefore they are a public good.
Question 3
0/1pts
Anthony loves going to the opera while Becky loves watching football. The following diagram shows the
payoffs for their choice of activity. For example if Anthony chooses opera and Becky chooses football,
then the activities are valued at GBP 10 to Anthony and GBP 20 to Becky, respectively. Assume that they
can only choose one activity (i.e. they cannot randomise). Based on this information, which of the
following statements is correct?
Becky
Opera Football
Opera 80, 10 10, 20
Anthony I otball 0,0 20, 40
You Answered
If Anthony offers GBP 50 to Becky for coming to the opera with him, then (Opera, Opera) will definitely be chosen.
With the payoff of (30, 60) for (Opera, Opera), it is now a Nash equilibrium. However, (Football, Football)
remains a Nash equilibrium and therefore without coordination beforehand, there is no certainty that
(Opera, Opera) will be chosen.
There are two Nash equilibria: (Opera, Opera) and (Football, Football).
If Anthony announces that he will choose Opera and sticks to it, then (Opera, Opera) will be chosen.
Correct Answer
If Anthony offers GBP 20 to Becky for coming to the opera with him, then (Opera, Opera) may be chosen.
Question 4
1/1 pts
Alan and Beatrice are students who are suspected of colluding on their assignment. The examiners are
going to interview each of them individually, in separate rooms. The following table shows the payoffs of
Alan and Beatrice, if both were completely selfish, depending on whether each decides to Deny or
Confess. Assume that unless stated otherwise, Alan and Beatrice are completely selfish. In which of the
https://gatech.instructure.com/courses/442722/quizzes/630805 2/16
, 2/21/25, 12:43 PM HW2: Homework Assignment for Module 2: Online SP25 ECON 2105 Principles of Macroeconomics
following cases could the examiners' scheme fail to produce the outcome (Confess, Confess)?
Beatrice
Deny Confess
Deny 45, 50 0,70
Alan Confess 65,0 40, 40
Correct!
Alan and Beatrice manage to communicate using their mobile phones.
This will lead to a possible agreement between the two to deny, which will give them a better outcome
than (Confess, Confess).
Correct!
Alan is so fond of Beatrice that he would never confess that they colluded.
This is the case where Alan places value on the payoff of Beatrice and as such internalises the cost that
his action inflicts on Beatrice. In this particular case, his payoff from confessing becomes so low (possibly
negative) that it would be a dominant strategy to deny. Then the outcome (Confess, Confess) would never
be reached.
If one person continues to deny but then finds out that the other person has confessed, the disappointment is equivalent
to an extra 10 marks off the mark he/she is given.
Alan and Beatrice hate lying.
Question 5
1/1 pts
The following figure depicts possible indifference curves of Alan, whose utility depends on his and/or his
friend Beatrice's levels of consumption. Alan's consumption is along the horizontal axis while Beatrice's
consumption is along the vertical axis. Which of the indifference curves below represent altruistic
preferences?
4 (a)
5
consumption
b
Beatrice's
. (d)
’
’
/\
245
P o
45°N\(
) c)
Alan’'s consumption
Correct!
(d)
Here Alan's utility partly depends on Beatrice's consumption, so he is altruistic.
https://gatech.instructure.com/courses/442722/quizzes/630805 3/16
