October 8, 2020
###### Consider the following CobbDouglas production function and SolowSwan model. Cobb-Douglas: Y = F(K, L) = AKGLPC’ SolowSwan: Y; = Fug, L.) 2 AKng0 1.
October 8, 2020

Hello, I need help for the following microeconomics question. Thank you very much!

Question 5Will and Davy are playing the following game of &quot; Liar’s poker &quot; with the followingA deck of cards consisting of 4 kings and faces is shuffled and put in front ofWill . Will looks at the top card and makes a potentially untruthful announcementof &quot; King &quot; or &quot; Ace &quot; If he announces &quot; King , the game ends with no exchange ofmoney . If he announces &quot; Ace &quot; Davy gets to take an action. Davy has the option of &quot; Folding &quot; or &quot; Calling &quot; If he Folds , Davy pays Will 80.50 .If he Calls and Will is holding the Ace , Davy pays Will \$1 . If he Calls and Will isholding the King , Will pays Davy &amp;a ) Draw the extensive form and normal form of this game . ( 10 marks )b ) Find all the pure strategy NE . ( 2 marks )Given that Will has a King how often should he bluff ? ( 5 marks ) ( Hint : Constconsiderized strategy equilibrium )Given that Will announces an Ace , how often should Davy call him ? ( 8 marks )