Question 1 The steepness (slope) of an indifference curve indicates which of the following?
A. The tradeoff a consumer is willing to make between price and quality
B. The change in price holding product benefit constant
C. The change in benefit holding price constant
D. The tradeoff between consumer surplus and producer surplus
E. None of the above
Question 2 Which of the following conditions does not tend to heat up price competition?
A. Many sellers in the market
B. Products are differentiated/buyers have high switching costs
C. The industry is stagnant or declining
D. Some firms have excess capacity
E. There are large/infrequent sales orders
Question 3 In which of the following ways can entry erode incumbents' profits?
A. Entrants divide market demand among fewer sellers
B. Entrants reduce internal rivalry
C. Entrants increase market concentration
D. Entrants usually grow the market for all parties
E. Entrants decrease market concentration
Question 4 What type of curve can be used to describe the set of price-quality combinations that yields the same consumer surplus to an individual?
A. Frontier curve
B. Learning curve
C. Indifference curve
D. Implicit curve
E. Level curve
Question 5 Which of the following is not a part of the five-forces framework?
A. Supplier Power
B. Buyer Power
C. Substitutes and Complements
D. Regulation
E. Internal rivalry
Question 6 Which of following factors should be considered when assessing complements and substitutes?
A. Availability of close substitutes and/or complements
B. Price-value characteristics of substitutes/complements
C. Price elasticity of industry demand
D. All of the above
E. None of the above
Question 7 Which of the following is generally thought of as a buyer in the hospital industry?
A. Medical equipment companies
B. Patients
C. Pharmaceutical drug houses
D. Nurse
E. Technician
Question 8 Which of the following is generally thought of as a supplier in the hospital industry?
A. Medicaid
B. Admitting physicians
C. Patients
D. Hospital-based physician
E. Medicare
Question 9 Substitutes erode profits because of which of the following factor?
A. Substitutes compete for similar inputs driving up production costs
B. Substitutes divide demand and drive up internal rivalry
C. Firms producing substitutes use similar worker skills dividing the labor pool
D. Manufacturers of substitutes enter markets later and have lower sunk costs
E. None of the above
Question 10 What is the perceived benefit of a product per unit consumed minus the product's monetary price?
A. Maximum willingness-to-pay
B. Value chain
C. Value creation
D. Competitive advantage
E. Consumer surplus