Consider the following strategic setting. there are three people: amy, bart, and chris. amy and bart have hats. these three people are arranged in a room so that bart can see everything that amy does, chris can see everything that bart does, but the players can see nothing else. in particular, chris cannot see what amy does. first, amy chooses either to put her hat on her head (abbreviated by h) or on the floor (f). after observing amy’s watson_c02_007-021hr. indd 19 11/12/12 9: 25 am 20 2: the extensive form move, bart chooses between putting his hat on his head or on the floor. if bart puts his hat on his head, the game ends and everyone gets a payoff of 0. if bart puts his hat on the floor, then chris must guess whether amy’s hat is on her head by saying either "yes" or "no." this ends the game. if chris guesses correctly, then he gets a payoff of 1 and amy gets a payoff of −1. if he guesses incorrectly, then these payoffs are reversed. bart’s payoff is 0, regardless of what happens. represent this game in the extensive form (draw the game tree).

You have $22,000 to invest in a stock portfolio. your choices are stock x with an expected return of 11 percent and stock y with an expected return of 13 percent. if your goal is to create a portfolio with an expected return of 11.74 percent, how much money will you invest in stock x? in stock y?

Suppose that a worker in agland can produce either 10 units of organic grain or 2 units of incense per year, and a worker in zenland can produce either 5 units of organic grain or 15 units of incense per year. there are 20 workers in agland and 10 workers in zenland. currently the two countries do not trade. agland produces and consumes 100 units of grain and 20 units of incense per year. zenland produces and consumes 50 units of grain and no incense per year. if each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by a. 30 units of grain and 100 units of incense. b. 30 units of grain and 150 units of incense. c. 50 units of grain and 90 units of incense. d. 50 units of grain and 130 units of ince

In december of 2004, the company you own entered into a 20-year contract with a grain supplier for daily deliveries of grain to its hot dog bun manufacturing facility. the contract called for "10,000 pounds of grain" to be delivered to the facility at the price of $100,000 per day. until february 2017, the supplier provided processed grain which could easily be used in your manufacturing process. however, no longer wanting to absorb the cost of having the grain processed, the supplier began delivering whole grain. the supplier is arguing that the contract does not specify the type of grain that would be supplied and that it has not breached the contract. your company is arguing that the supplier has an onsite processing plant and processed grain was implicit to the terms of the contract. over the remaining term of the contract, reshipping and having the grain processed would cost your company approximately $10,000,000, opposed to a cost of around $1,000,000 to the supplier. after speaking with in-house counsel, it was estimated that litigation would cost the company several million dollars and last for years. weighing the costs of litigation, along with possible ambiguity in the contract, what are three options you could take to resolve the dispute? which would be the best option for your business and why?