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Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course. Try to create discussions about the material we see in class, instead of just thinking of economics in general (this is an introduction to microeconomics class, not a policy or government class).

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

Practice Quiz 15, Question 11

–1 vote
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Suppose that the city of NYC contemplates giving a subsidy of $LaTeX: xx to anyone who bikes instead of driving.

Among the following values for the subsidy, what is the lowest value such that "Drive" stops being a dominant strategy for both groups?

the answer of this question was $1.25, how do i solve this?

asked May 1 by canvas-e415876b4fe9a (251 points)

1 Answer

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when solving a question like this you need to plug in the answers and see which of them best fits the question that is being asked. When you plug in a $1.25 to the bike the bike price then goes up. When looking at the diagram you can then tell that for both bike and drive there is no dominant strategy with the price being raised a $1.25. The reason behind this is that a dominant strategy for drive is set at $2 and when you raise bike a $1.25 it then becomes more of a strategy to bike in some cases.
answered May 1 by canvas-98fa74eec54bd (240 points)
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