13. Which of the following statements about the prisoner's dilemma is false?
(A) The prisoner's dilemma in a one-shot game leads to a noncooperative, equilibrium outcome.
(B) The prisoner's dilemma game can never reach a Nash equilibrium as long as players do not cooperate.
(C) The prisoner's dilemma in repeated games could lead to cooperation especially if there is some enforcement mechanism that punishes a player who does not cooperate.
(D) Players caught in a prisoner's dilemma act in selfish ways that lead to an equilibrium that is sub-optimal.

14. Suppose the production function for good $q$ is given by $q = 3k + 2l$ where $k$ and $l$ are capital and labor inputs. Consider three statements about this function: I. The function exhibits constant returns to scale. II. The function exhibits diminishing marginal productivities to all inputs. III. The function has a constant rate of technical substitution. Which of these statements is true? (A) All of them. (B) None of them. (C) I and II but not III. (D) I and III but not II.

15. Suppose a negative externality exists in a market. If transactions costs are low and parties are willing to bargain, then, according to the Coase theorem, (A) An efficient solution can be reached regardless of the initial assignment of property rights. (B) An equitable solution can be reached only if property rights are assigned to the victims of pollution and not the polluters. (C) An equitable solution can be reached only if property rights are assigned to polluters and not to the victims of pollution. (D) Government intervention is necessary to reach an efficient and equitable solution.

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