VWO / HAVO Centraal Examen (Netherlands) · Economics

Game Theory, Information Asymmetry and Market Failure

11 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 11 questions

  1. In non-cooperative game theory, what is a dominant strategy (dominante strategie) for a player?
  2. What characterizes a Nash equilibrium in a simultaneous game between two firms?
  3. What is the economic phenomenon of adverse selection (averechtse selectie) in the health insurance market?
  4. What is moral hazard (moreel wangedrag) in the context of financial or insurance contracts?
  5. What two defining economic characteristics distinguish a pure public good (zuiver collectief goed), such as national defense or street lighting?
  6. What is the free-rider problem (meeliftgedrag) associated with public goods?
  7. How does a negative production externality (negatief extern effect), such as chemical pollution from an industrial factory, affect market efficiency?
  8. Which policy instrument directly internalizes a negative externality by imposing a tax equal to the marginal external damage per unit of pollution?
  9. According to the Coase theorem, when can private bargaining resolve externality problems efficiently without government regulatory mandates?
  10. What is the primary mechanism through which the European Union Emissions Trading System (EU ETS) limits industrial greenhouse gas emissions?
  11. What is a tragedy of the commons (tragedie van de meent) in environmental and resource economics?

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