Assignment:
QUESTION 1 Firms that buy inputs from suppliers have more bargaining power when:
A. the costs of switching suppliers are low
B. the suppliers sell highly differentiated products
C. there are many other buyers in the market
D.lhey purchase a relatively small quantity of product
QUESTION 2 If a firm successfully differentiates its product from other products in the market, then we should expect the elasticity of demand for the differentiated product to become:
A. retain the same elasticity of demand
B. We do not have enough information to answer this question
C. more elastic
D. more inelastic
QUESTION 3 Which of the following factor does NOT contribute to higher rivalry in a market?
O A. Lrnv switching costs for buyers
O B. Fast growth in the market
O C. High fixed costs
O D. Large number of competitors
QUESTION 4 Movie theaters tend to charge higher ticket prices for evening and weekend shows. This implies that the demand for these tickets is relatively:
O A. necessary
O B. unresponsive to income changes
O C. elastic
O D.inelastic
QUESTION 5 Recently, Quandl announced that they were purchased by NASDAQ. Both fines provide historic market data and other information about exchange Vansactions in equity and futures markets, so they offer substitute products. After the merger is completed, we should expect that the price of these market data products offered by the combined firm will:
A. decline
D. increase
QUESTION 6 Suppose the marginal cost to produce Apple iPhones is $400 per phone. Initially, the elasticity of demand for the iPhone is -2 when the product has no close substitutes. As other smart phones enter the market place, the elasticity of demand for iPhones changes to -3. If Apple is setting prices to maximize profits, how much should the iPhone price decline in response to the entry by competing phones?
Q A. $200
O B. $300
Q C. $400
O D. $600
QUESTION 7 To successfully adapt a pdce discrimination strategy, the seller must:
O A. offer distinct products for each separate pricing group
O s. be able to identify the willingness to pay for each individual customer
O C. be able to prevent resale between buying groups
Q D. be able to know which customers belong to fhe different pricing groups
QUESTION 8 Which group is offered the lower price under a price discrimation scheme?
O A. Elastic demand group
O B.Inelastic demand group
QUESTION 9 The remaining consumer surplus is zero under a successful first-degree price discrimination scheme.
Q True
O False
QUESTION 10 In general, women's Gothing items (e.g., running shoes) have higher prices than comparable products designed for men due to price discrimination. How do the Gothing sellers prevent resale in these markets?
A. State censumer protection laws prohibit selling goods intended for one group to members of the other group
B. The retailers are prohibited from selling products intended for one group to members of the othergroup
C. Price discrimination is not possible in clothing markets
D. The clothing products are differentiated by styling or design features
QUESTION 11 Which of the following claims is NOT true?
A. If arbitrage between customers is possible, the seller should offer uniform prices
B. Volume discounts are not a form of price discdmination
C. Bundling is profitable if the willingness to pay for the bundle is more homogeneous than the willingness to pay for the bundle components
D. Price discrimination is feasible if the costs of arbitrage exceed the difference in prices charged to the different customers
QUESTION 12 Metering is a type of direct price discrimination.
A .True
b. False
QUESTION 13 The joint payoffs to both players in a prisoners' dilemma would be higher if the players could collude.
A True
B False
QUESTION 14 Which of the following statements is true?
A. Players take actions that maximize theirjoinl profits under a Nash equilibrium
B. One of the players must have afirst-mover advantage in a two-player sequenfial game
C. Nash equilibria are only defined for repeated games
D. There maybe no unique Nash equilibrium to atwo-player simultaneous game.
OUESTION 15 Please refer to the game associated with Multiple Choice ques8on 8. If the low price /low price payoffs for both players are 30 (instead o), is this game a Prisoners dilemma?
A. Yes
B. No
QUESTION 16 Please refer to the two-player simultaneous game in Multiple Choice question 3. How many pure strategy Nash equilibria does this game have?
A.0
B.1
C.2
D.3
QUESTION 17 Sonny and Cher were a popular singing duo in the 1970's. Affer establishing their success in the music business, they met to decide how future eamings should be split among the two partners.
Together, they could eam 55 million per year from their music act. Separately, Cher could eam 51 million as an acfress, and Sonny did not have any outside options for employment. How much of the 55 million joint eamings should be paid to Cher?
A. 51 million
B. 52 millicn
C. 52.5 million
D.53 million
QUESTION 18 For threats or commitments in a game to be effective, they must be:
A. credible
B. irrational
C. ethical
D. None of the above
QUESTION 19 The prospects for success facing your startup are risky: there is a 0.5 probability that you lose 51 million, 0.2 probability that you break even, and 0.3 probability that you make 55 million. What is the expected return from the startup?
A. Lose 51 million
B. Break even
C.Gain 51 million
D. Gain 51.5 million
Your ad agency advises you that the new email marketing campaign that they designed is expected to O A. 150 have 0.3% of the messages opened. Then, 10% of the recipients who open the email message with click through to your website. If you send the email marketing message l0 500,000 people in the first O 8.1500 round, what is the expected number of people who will visit your website?
A. 15000
B. 100000
QUESTION 21 Which type of randomness can be fully described by a probability distribution?
A. Risk
B. Uncertainty
C. Both of the above
D.None ofthe above
QUESTION 22 Which of the following statements is NOT true?
A. The outcomes from Vckrey auctions are identical to first-price sealed bid auctions
B. English auctions are also known as oral auctions
C.Oral auctions are also second-price auctions
D. Common value auctions are subject to the winners curse
QUESTION 23 The prices achieved by common-value auctions lend to increase as more information is provided to buyers.
True
False
QUESTION 24 There are five buyers al an online book auction with willingness to pay {520, 525, 530, 53D, 540}. What is the likely value of the winning bid?
A. Just over 525
B. Just over 530
C.Justover535
D. Just under 540
QUESTION 25 In a situation subject to asymmefdc information, which party should use the screening techniques?
A. Neither party should use screens
B. Mare informed party
C. We do not have enough information to answer this question
D. Less informed party
QUESTION 26 Which of the following actions can be an example of a signal designed to reduce the impact of asymmetric information?
A. A money-back guarantee
B. Students pursue graduate training
C. Students take an unpaid internship
D. All of the above
QUESTION 27 A business owner attains a bank loan to purchase a new delivery truck for the business, but they use the funds to take a vacation to Australia. Which of the following terms describes the problem with this situation?
A. Both moral hazard and adverse selection
B. There is not a problem with this situation
QUESTION 28 Firms that hire outside wnsultants can reduce the impact of moral hazard by:
A. hidng work on a fixed-fee basis
B. monitoring the quality of the completed work
C. hiring consultants with an established reputation for not shirking
D. All of the above
QUESTION 29 Please refer to Individual Problem 205. If the client pays the cost for Form A for all forms processed, what is the average gain or Toss earned across all forms processed?
A. Lose 50.10 per form
B. Break even
C. Gain 50.10 per form
D. Gain 50.15 per form
QUESTION 30 Which of the following statements about moral hazard is true?
A. Moral hazard arises from actions that cannot be observed
B. Shirking is a form of moral hazard
C. Moral hazard involves taking excessive risk
D. All of the above