Q.1 In game theory, a 'zero-sum game' means:
Both players can win simultaneously
One player’s gain is exactly equal to the other player’s loss
The total payoff is always positive
The game always ends in a draw
Explanation - Zero-sum games are defined such that the sum of gains and losses of all players is zero.
Correct answer is: One player’s gain is exactly equal to the other player’s loss
Q.2 Which of the following is NOT an assumption of a two-person zero-sum game?
Rationality of players
Finite strategies
Simultaneous decision-making
Both players can cooperate to maximize joint profit
Explanation - In two-person zero-sum games, cooperation is not assumed since one player’s gain is the other’s loss.
Correct answer is: Both players can cooperate to maximize joint profit
Q.3 What is a 'payoff matrix' in game theory?
A chart showing business profits
A matrix showing possible outcomes of different strategies
A matrix of supply and demand curves
A financial statement
Explanation - The payoff matrix represents the gains and losses for players under different strategies.
Correct answer is: A matrix showing possible outcomes of different strategies
Q.4 Which solution concept is commonly applied in two-person zero-sum games?
Nash equilibrium
Pareto optimality
Dominant strategy
Value of the game
Explanation - The value of the game indicates the guaranteed outcome under optimal strategies in a two-person zero-sum game.
Correct answer is: Value of the game
Q.5 If a payoff matrix has a saddle point, then:
The game has no solution
The game has a pure strategy solution
The game requires mixed strategy solution
The value of the game is undefined
Explanation - A saddle point represents a stable solution where both players use pure strategies.
Correct answer is: The game has a pure strategy solution
Q.6 In mixed strategy games, players:
Randomize over possible strategies
Stick to one strategy always
Cooperate with each other
Avoid making rational choices
Explanation - Mixed strategies involve assigning probabilities to different choices rather than committing to one.
Correct answer is: Randomize over possible strategies
Q.7 What does the 'minimax principle' mean in game theory?
Maximize minimum gain
Minimize maximum loss
Both A and B
Neither A nor B
Explanation - The minimax principle directs players to minimize their maximum possible loss, equivalent to maximizing their minimum gain.
Correct answer is: Both A and B
Q.8 A strategy that always provides better outcomes regardless of the opponent’s move is called:
Dominant strategy
Mixed strategy
Pure strategy
Suboptimal strategy
Explanation - Dominant strategies are the best choice regardless of the opponent’s actions.
Correct answer is: Dominant strategy
Q.9 Which of these is an example of a real-life zero-sum game?
Chess
Business partnership
Team sports with shared points
Stock market growth
Explanation - Chess is zero-sum as one player’s win is the other’s loss.
Correct answer is: Chess
Q.10 In a two-person zero-sum game, if no saddle point exists:
Game has no value
Players must use mixed strategies
Both players quit
Value of game is infinite
Explanation - If no saddle point exists, equilibrium is achieved through mixed strategies.
Correct answer is: Players must use mixed strategies
Q.11 The lower value of the game is:
The maximum of row minima
The minimum of row minima
The maximum of column maxima
The average of payoffs
Explanation - The lower value represents the guaranteed minimum payoff the row player can secure.
Correct answer is: The maximum of row minima
Q.12 The upper value of the game is:
The maximum of row minima
The minimum of column maxima
The maximum of column maxima
The average of payoffs
Explanation - The upper value represents the least guaranteed payoff for the column player.
Correct answer is: The minimum of column maxima
Q.13 If the lower value equals the upper value in a game:
The game has no solution
The game has a saddle point
The game requires mixed strategies
The game is unfair
Explanation - When upper and lower values match, a saddle point exists and the game is solved with pure strategies.
Correct answer is: The game has a saddle point
Q.14 Which of the following is an example of a non-zero-sum game?
Prisoner’s dilemma
Tic-tac-toe
Rock-paper-scissors
Chess
Explanation - Prisoner’s dilemma is non-zero-sum since both players may gain or lose together.
Correct answer is: Prisoner’s dilemma
Q.15 What is the Nash equilibrium?
Each player maximizes group payoff
No player can improve their payoff by unilaterally changing strategy
Both players always win
The strategy with the highest payoff
Explanation - Nash equilibrium occurs when players stick to their strategies because deviation won’t improve payoff.
Correct answer is: No player can improve their payoff by unilaterally changing strategy
Q.16 If two players are playing a zero-sum game and one player gains 8 units, the other player’s payoff is:
8
0
-8
Cannot be determined
Explanation - In zero-sum games, total payoff is zero, so one’s gain equals the other’s loss.
Correct answer is: -8
Q.17 Which of these methods can be used to solve mixed strategy games?
Graphical method
Linear programming
Algebraic method
All of the above
Explanation - Mixed strategy games can be solved using graphical, algebraic, or linear programming techniques.
Correct answer is: All of the above
Q.18 A game with a payoff matrix of size 2x2 is usually solved by:
Inspection
Linear programming
Graphical method
Iteration
Explanation - Simple 2x2 games are often solved by inspection, though mixed strategies may also be applied.
Correct answer is: Inspection
Q.19 In a two-person game, the player choosing rows is called:
Column player
Row player
Leader
Follower
Explanation - The player choosing strategies corresponding to rows of the payoff matrix is the row player.
Correct answer is: Row player
Q.20 In game theory, dominance means:
A strategy always better than another strategy
Players cooperating
Strategies producing equal payoffs
No equilibrium exists
Explanation - Dominance refers to one strategy consistently giving better payoffs than another.
Correct answer is: A strategy always better than another strategy
Q.21 Which of these is a key difference between pure and mixed strategies?
Pure involves probabilities, mixed doesn’t
Pure means one definite choice, mixed means probabilistic choice
Pure requires cooperation, mixed doesn’t
Pure is irrational, mixed is rational
Explanation - In pure strategies, players stick to one move; in mixed, they assign probabilities to choices.
Correct answer is: Pure means one definite choice, mixed means probabilistic choice
Q.22 The maximin strategy is chosen by:
Row player
Column player
Both players
Neither
Explanation - The row player uses maximin to maximize their minimum payoff.
Correct answer is: Row player
Q.23 The minimax strategy is chosen by:
Row player
Column player
Both players
Neither
Explanation - The column player uses minimax to minimize their maximum possible loss.
Correct answer is: Column player
Q.24 Which mathematical tool is most often used to analyze strategic interactions?
Game theory
Calculus
Statistics
Linear algebra
Explanation - Game theory provides the framework for studying decision-making in strategic situations.
Correct answer is: Game theory
Q.25 In business competition, game theory can help:
Predict competitor moves
Determine optimal pricing strategies
Decide on advertising campaigns
All of the above
Explanation - Game theory is widely applied in economics and business strategy to predict and plan decisions.
Correct answer is: All of the above