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FACULTY OF SCIENCE
INSTRUCTIONS TO CANDIDATES
1.
This examination paper contains a total of FOUR (4) questions and comprises FIVE (5) printed pages (including this page).
2.
3.
4.
Candidates may use calculators. However, they should lay out systematically
the various steps in the calculations.
PAGE 2
Question 1
[ 25 marks ]
PAGE 3
Question 2
[ 25 marks ]
There are three identical fair dice. On each die, which is considered as a cube,
numbers 1 and 6 are arranged on the opposite faces, so are numbers 2 and 5, and
numbers 3 and 4.
(i) When the three dice are thrown and settle on a table, let the numbers on
the top faces be x, y, and z , where x, y and z are integers between 1 and 6,
inclusively. Explain why the sum of the numbers which appear on the three faces
opposite to the three top faces is given by
21 (x + y + z) .
(ii)
where P3 ( 10) is the probability of obtaining three numbers (on the top faces)
from the three dice so that the sum is lesser than or equal to 10. Likewise, P3 (> 10)
is the probability of obtaining three numbers (on the top faces) from the three dice
so that the sum is bigger than 10.
(iii) Add one more die of the same type. Now we have four identical fair dice.
Explain why it is NOT possible to obtain an integer n, so that
P4 ( n) = P4 (> n) ,
where P4 ( n) is the probability of obtaining four numbers (on the top faces) from
the four dice so that the sum is lesser than or equal to n . Similarly, P4 (> n) is
the probability of obtaining four numbers (on the top faces) from the four dice so
that the sum is bigger than n .
PAGE 4
Question 3
[ 25 marks ]
(i)
B1
B2
B3
A1
A2
A3
(ii) Show that there are two Maxi - Mini strategies for A , namely, A2 and A3 .
Show that B1 is the only Maxi - Mini strategy for B .
(iii) Suppose that A chooses the Maxi - Mini strategy A2 . Then B will play B2
strategy to gain 4 . But if A anticipates that B plays B2 strategy, A will play
A1 strategy to gain 4 . The argument can be continued and B does not want to
wander away from the Maxi - Mini strategy B1 too far. Thus consider the diagram
B1
B2
A1
A2
Let p1 be the probability for A to play strategy A1 , and q1 the probability for B to
play strategy B1 . Find the optimal value of p1 for A to play the mixed strategies
between A1 and A2 .
(iv) On the other hand, suppose that A chooses the Maxi - Mini strategy A3 .
Then B will play B3 strategy to gain 4 . But if A anticipates that B plays B3
strategy, A will play A2 strategy to gain 4 . Thus consider the diagram
B1
B3
A2
A3
Let p2 be the probability for A to play strategy A3 , and q2 the probability for B to
play strategy B1 . Find the optimal value of p2 for A to play the mixed strategies
between A2 and A3 .
(iv) Should A choose A2 as the Maxi - Mini strategy to play the mixed strategies
as described in (iii) , or choose A3 as the Maxi - Mini strategy to play the mixed
strategies as described in (iv) ? Justify your answers.
Question 4 starts on page five .
PAGE 5
Question 4
[ 25 marks ]
In Game Theory, consider two companies, one called Good Company, and the other
one Bad Company. There are two job seekers, one called Good Employee, and the
other Bad Employee. Good Company is willing to pay a higher wage (W ) than
Bad Company. That is,
Wgood > Wbad .
(4.1)
However, there is no real way to tell in advance which job seeker will be of the
good or bad type, except the signal on the cost of education (C) the job seeker
paid . Good Employee knows that she/ he deserves to be paid more for her/ his
productivity (P ) , so she/ he invested more on education than Bad Employee. That
is,
Cgood > Cbad > 0 .
(4.2)
Assume that productivity P is given by
Pgood = k Cgood
and
Pbad = k Cbad ,
(4.3)
and
(4.4)
END OF PAPER.