Question 1 5 out of 5 points
In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:Answer
Selected Answer: contribution margin per unit
Correct Answer: contribution margin per unit
Question 2 0 out of 5 points
A ____ total cost function implies that marginal costs ____ as output is increased.Answer
Selected Answer: linear; increase linearly
Correct Answer: linear; are constant
Question 3 5 out of 5 points
The short-run cost function is:Answer
Selected Answer: relevant to decisions in which one or more inputs to the production process are fixed
Correct Answer: relevant to decisions in which one or more inputs to the production process are fixed
Question 4 5 out of 5 points
In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent. The size that is becoming more predominant is presumed to be least cost. This is called:Answer
Selected Answer: survivorship analysis.
Correct Answer: survivorship analysis.
Question 5 0 out of 5 points
In determining the shape of the cost-output relationship only ____ depreciation is relevant.Answer
Selected Answer: time
Correct Answer: usage
Question 6 5 out of 5 points
The main difference between perfect competition and monopolistic competition is:Answer
Selected Answer: The degree of product differentiation
Correct Answer: The degree of product differentiation
Question 7 5 out of 5 points
An "experience good" is one that:Answer
Selected Answer: Has undetectable quality when purchased
Correct Answer: Has undetectable quality when purchased
Question 8 0 out of 5 points
All of the following are true for both competition and monopolistic competition in the long run, except one of them. Which is it?Answer
Selected Answer: The barriers to entry and exit are relatively easy
Correct Answer: P = MC
Question 9 5 out of 5 points
If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.Answer
Selected Answer: more; increase; down
Correct Answer: more; increase; down
Question 10 0 out of 5 points
In the long-run, firms in a monopolistically competitive industry willAnswer
Selected Answer: earn substantial economic profits
Correct Answer: tend to just cover costs, including normal profits
Question 11 5 out of 5 points
Regulatory agencies engage in all of the following activities except _______.Answer
Selected Answer: setting federal and state income tax rates on regulated firms
Correct Answer: setting federal and state income tax rates on regulated firms
Question 12 0 out of 5 points
In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale. If price were set equal to marginal cost, then:Answer
Selected Answer: price would exceed average cost.
Correct Answer: price would equal average cost.
Question 13 0 out of 5 points
The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:Answer
Selected Answer: first-degree price discrimination
Correct Answer: peak-load pricing
Question 14 0 out of 5 points
Of the following, which is notan economic rationale for public utility regulation?Answer
Selected Answer: protection of consumers from price discrimination
Correct Answer: constant cost industry
Question 15 0 out of 5 points
When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation.Answer
Selected Answer: oligopoly
Correct Answer: monopoly
Question 16 0 out of 5 points
If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical.Answer
Selected Answer: marginal profit
Correct Answer: marginal cost
Question 17 5 out of 5 points
Which of the following is an example of an oligopolistic market structure?Answer
Selected Answer: air transport industry
Correct Answer: air transport industry
Question 18 0 out of 5 points
Some market conditions make cartels MORE likely to succeed in collusion. Which of the following will make collusion more successful?Answer
Selected Answer: The firms are all about the same size
Correct Answer: The orders are small and frequent
Question 19 0 out of 5 points
In a kinked demand market, whenever one firm decides to lower its price,Answer
Selected Answer: one half of the firms follow and one half of the firms don't follow the price cut.
Correct Answer: other firms will automatically follow.
Question 20 5 out of 5 points
Barometric price leadership exists whenAnswer
Selected Answer: one firm in the industry initiates a price change and the others follow it as a signal of changes in cost or demand in the industry.
Correct Answer: one firm in the industry initiates a price change and the others follow it as a signal of changes in cost or demand in the industry.
Question 21 5 out of 5 points
The difference between cooperative and non-cooperative games isAnswer
Selected Answer: cooperative games allow side payments to support collusion
Correct Answer: cooperative games allow side payments to support collusion
Question 22 5 out of 5 points
Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except whenAnswer
Selected Answer: the hostage can be revoked for just causes
Correct Answer: the hostage can be revoked for just causes
Question 23 0 out of 5 points
Credibility in threats and commitments in sequential games is based onAnswer
Selected Answer: explicit communications with competitors
Correct Answer: analyzing best reply responses
Question 24 0 out of 5 points
A key to analyzing subgame perfect equilibrium strategy in sequential games isAnswer
Selected Answer: information sets that are known with certainty
Correct Answer: an explicit order of play for at least some participants
Question 25 0 out of 5 points
Non-cooperative sequential games can incorporate all the following features exceptAnswer
Selected Answer: an explicit order of play
Correct Answer: third-party enforceable agreements
Question 26 0 out of 5 points
Which of the statements about price discrimination is (are) false?Answer
Selected Answer: There must be differences in the elasticity of demand from one segment to another.
Correct Answer: Public utilities practice first-degree price discrimination.
Question 27 0 out of 5 points
Third-degree price discrimination exists whenever:Answer
Selected Answer: the seller knows exactly how much each potential customer is willing to pay and will charge accordingly.
Correct Answer: the seller can separate markets by geography, income, age, etc., and charge different prices to these different groups.
Question 28 0 out of 5 points
Vacation tours to Europe invariably package visits to disparate regions: cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when:Answer
Selected Answer: a preference for cities is always higher than preferences for mountain vistas.
Correct Answer: the preference rankings of vacationers travelling together are negatively correlated.
Question 29 5 out of 5 points
____ is a new product pricing strategy which results in a high initial product price. This price is reduced over time as demand at the higher price is satisfied.Answer
Selected Answer: Skimming
Correct Answer: Skimming
Question 30 5 out of 5 points
The optimal mark-up is: m = -1/ (E+1). When the mark-up on cookware equals 50%, then demand elasticity (E) for cookware is:Answer
Selected Answer: -2
Correct Answer: -2
Question 31 5 out of 5 points
When borrowers who do not intend to repay are able to hide their bad credit histories, a lender's well-intentioned borrowers shouldAnswer
Selected Answer: offer more collateral in exchange for lower interest charges
Correct Answer: offer more collateral in exchange for lower interest charges
Question 32 0 out of 5 points
Agency problems appear in many settings within a firm. All of the following are examples, except which is NOT a good example of this problem? Answer
Selected Answer: Diversified stockholders are more enthusiastic on accepting business risks than are firm managers.
Correct Answer: Firm managers receive cash bonuses based on the performance of the firm.
Question 33 5 out of 5 points
Buying electricity off the freewheeling grid at one quarter 'til the hour for delivery on the hour illustrates:Answer
Selected Answer: spot market transactions
Correct Answer: spot market transactions
Question 34 5 out of 5 points
Vertical integration may be motivated by all of the following except:Answer
Selected Answer: Economies of ever wider spans of managerial control
Correct Answer: Economies of ever wider spans of managerial control
Question 35 5 out of 5 points
The Herfindahl-Hirschman index (also shortened to just the Herfindahl index) is a measure of ____.Answer
Selected Answer: market concentration
Correct Answer: market concentration
Question 36 5 out of 5 points
____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant.Answer
Selected Answer: Externalities
Correct Answer: Externalities
Sunday, March 17, 2013 5:46:08 PM EDTOK
Question 1 5 out of 5 points
In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:Answer
Selected Answer: contribution margin per unit
Correct Answer: contribution margin per unit
Question 2 5 out of 5 points
In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent. The size that is becoming more predominant is presumed to be least cost. This is called:Answer
Selected Answer: survivorship analysis.
Correct Answer: survivorship analysis.
Question 3 5 out of 5 points
George Webb Restaurant collects on the average $5 per customer at its breakfast & lunch diner. Its variable cost per customer averages $3, and its annual fixed cost is $40,000. If George Webb wants to make a profit of $20,000 per year at the diner, it will have to serve__________ customers per year.Answer
Selected Answer: 30,000 customers
Correct Answer: 30,000 customers
Question 4 5 out of 5 points
Break-even analysis usually assumes all of the following except:Answer
Selected Answer: in the short run, there is no distinction between variable and fixed costs.
Correct Answer: in the short run, there is no distinction between variable and fixed costs.
Question 5 5 out of 5 points
The short-run cost function is:Answer
Selected Answer: relevant to decisions in which one or more inputs to the production process are fixed
Correct Answer: relevant to decisions in which one or more inputs to the production process are fixed
Question 6 5 out of 5 points
In the long-run, firms in a monopolistically competitive industry willAnswer
Selected Answer: tend to just cover costs, including normal profits
Correct Answer: tend to just cover costs, including normal profits
Question 7 0 out of 5 points
Under asymmetric information,Answer
Selected Answer: you always get cheated
Correct Answer: at best you get what you pay for
Question 8 5 out of 5 points
The price for used cars is well below the price of new cars of the same general quality. This is an example of:Answer
Selected Answer: A Lemon's Market
Correct Answer: A Lemon's Market
Question 9 5 out of 5 points
The main difference between perfect competition and monopolistic competition is:Answer
Selected Answer: The degree of product differentiation
Correct Answer: The degree of product differentiation
Question 10 5 out of 5 points
If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.Answer
Selected Answer: more; increase; down
Correct Answer: more; increase; down
Question 11 0 out of 5 points
Declining cost industriesAnswer
Selected Answer: have diseconomies of scale.
Correct Answer: have marginal cost curves below their average cost curve.
Question 12 5 out of 5 points
Of the following, which is notan economic rationale for public utility regulation?Answer
Selected Answer: constant cost industry
Correct Answer: constant cost industry
Question 13 5 out of 5 points
____ as practiced by public utilities is designed to encourage greater usage and therefore spread the fixed costs of the utility's plant over a larger number of units of output.Answer
Selected Answer: Block pricing
Correct Answer: Block pricing
Question 14 5 out of 5 points
Regulatory agencies engage in all of the following activities except _______.Answer
Selected Answer: setting federal and state income tax rates on regulated firms
Correct Answer: setting federal and state income tax rates on regulated firms
Question 15 5 out of 5 points
The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:Answer
Selected Answer: peak-load pricing
Correct Answer: peak-load pricing
Question 16 5 out of 5 points
"Conscious parallelism of action" among oligopolistic firms is an example of ____.Answer
Selected Answer: informal, or tacit, cooperation
Correct Answer: informal, or tacit, cooperation
Question 17 5 out of 5 points
A cartel is a situation where firms in the industryAnswer
Selected Answer: have an agreement to restrict output.
Correct Answer: have an agreement to restrict output.
Question 18 5 out of 5 points
Even ideal cartels tend to be unstable becauseAnswer
Selected Answer: firms can benefit by secretly selling more than they promised the other firms
Correct Answer: firms can benefit by secretly selling more than they promised the other firms
Question 19 5 out of 5 points
In a kinked demand market, whenever one firm decides to lower its price,Answer
Selected Answer: other firms will automatically follow.
Correct Answer: other firms will automatically follow.
Question 20 5 out of 5 points
The existence of a kinked demand curve under oligopoly conditions may result inAnswer
Selected Answer: price rigidity
Correct Answer: price rigidity
Question 21 5 out of 5 points
The starting point of many methods for predicting equilibrium strategy in sequential games isAnswer
Selected Answer: endgame analysis
Correct Answer: endgame analysis
Question 22 5 out of 5 points
Essential components of a game include all of the following except:Answer
Selected Answer: cooperation
Correct Answer: cooperation
Question 23 5 out of 5 points
Credibility in threats and commitments in sequential games is based onAnswer
Selected Answer: analyzing best reply responses
Correct Answer: analyzing best reply responses
Question 24 5 out of 5 points
In a game, a dominated strategy is one where:Answer
Selected Answer: It is always the best strategy
Correct Answer: It is always the best strategy
Question 25 5 out of 5 points
Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except whenAnswer
Selected Answer: the hostage can be revoked for just causes
Correct Answer: the hostage can be revoked for just causes
Question 26 5 out of 5 points
Vacation tours to Europe invariably package visits to disparate regions: cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when:Answer
Selected Answer: the preference rankings of vacationers travelling together are negatively correlated.
Correct Answer: the preference rankings of vacationers travelling together are negatively correlated.
Question 27 5 out of 5 points
____ is the price at which an intermediate good or service is transferred from the selling to the buying division within the same firm.Answer
Selected Answer: Transfer price
Correct Answer: Transfer price
Question 28 5 out of 5 points
The segmenting of customers into several small groups such as household, institutional, commercial, and industrial users, and establishing a different rate schedule for each group is known as:Answer
Selected Answer: third-degree price discrimination
Correct Answer: third-degree price discrimination
Question 29 5 out of 5 points
To maximize profits, a monopolist that engages in price discrimination must allocate output in such a way as to make identical the ____ in all markets.Answer
Selected Answer: marginal revenue
Correct Answer: marginal revenue
Question 30 5 out of 5 points
Firms that have a cover charge for their customers and charge for each item they purchase as well are exhibitingAnswer
Selected Answer: two-part price discrimination.
Correct Answer: two-part price discrimination.
Question 31 5 out of 5 points
Non-redeployable durable assets that are dependent upon unique complementary and perfectly redeployable assets to achieve substantial value-added will typically be organized asAnswer
Selected Answer: a vertically integrated firm
Correct Answer: a vertically integrated firm
Question 32 5 out of 5 points
Which of the following are not approaches to resolving the principal-agent problem?Answer
Selected Answer: straight salary contracts
Correct Answer: straight salary contracts
Question 33 0 out of 5 points
Governance mechanisms are designedAnswer
Selected Answer: to enhance the flexibility of restrictive covenants
Correct Answer: to resolve post-contractual opportunism
Question 34 5 out of 5 points
Agency problems appear in many settings within a firm. All of the following are examples, except which is NOT a good example of this problem? Answer
Selected Answer: Firm managers receive cash bonuses based on the performance of the firm.
Correct Answer: Firm managers receive cash bonuses based on the performance of the firm.
Question 35 5 out of 5 points
____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant.Answer
Selected Answer: Externalities
Correct Answer: Externalities
Question 36 5 out of 5 points
The antitrust laws regulate all of the following business decisions except ____.Answer
Selected Answer: wage levels
Correct Answer: wage levels
Sunday, March 17, 2013 8:09:01 PM EDT
Top Related