ECO 550 Final Exams

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Question 1

4 out of 4 points

In a game, a dominated strategy is one where:

Selected Answer:

Correct

It is always the best strategy

Correct Answer:

Correct

It is always the best strategy

· Question 2

4 out of 4 points

The starting point of many methods for predicting equilibrium strategy in sequential games is

Selected Answer:

Correct

endgame analysis

Correct Answer:

Correct

endgame analysis

· Question 3

4 out of 4 points

Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except when

Selected Answer:

Correct

the hostage can be revoked for just causes

Correct Answer:

Correct

the hostage can be revoked for just causes

· Question 4

4 out of 4 points

The Prisoner’s Dilemma involves two spies who are held in separate soundproof rooms. But even if the two spies could communicate, what makes it difficult for them to achieve the cooperative solution (both not confessing)?

· Question 5

4 out of 4 points

Non-cooperative sequential games can incorporate all the following features except

· Question 6

4 out of 4 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:

· Question 7

4 out of 4 points

__ is the price at which an intermediate good or service is transferred from the selling to the buying division within the same firm.

· Question 8

4 out of 4 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.

· Question 9

4 out of 4 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:

· Question 10

4 out of 4 points

Third-degree price discrimination exists whenever:

· Question 11

4 out of 4 points

To accomplish its purpose a linear profit-sharing contract must

· Question 12

0 out of 4 points

When retail bicycle dealers advertise and perform warranty repairs but do not deliver the personal selling message that Schwinn has designed as part of the marketing plan but cannot observe at less than prohibitive cost, the manufacturer has encountered a problem of __.

· Question 13

4 out of 4 points

Buying electricity off the freewheeling grid at one quarter ’til the hour for delivery on the hour illustrates:

· Question 14

4 out of 4 points

Vertical integration may be motivated by all of the following except:

· Question 15

4 out of 4 points

When manufacturers and distributors establish credible commitments to one another, they often employ

· Question 16

4 out of 4 points

The __ is equal to the some of the squares of the market shares of all the firms in an industry.

· Question 17

4 out of 4 points

__ yields the same results as the theory of perfect competition, but requires substantially fewer assumptions than the perfectly competitive model.

· Question 18

4 out of 4 points

The lower the barriers to entry and exit, the more nearly a market structure fits the __ market model.

· Question 19

4 out of 4 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.

· Question 20

4 out of 4 points

The sentiment for increased deregulation in the late 1970’s and early 1980’s has been felt most significantly in the price regulation of

· Question 21

4 out of 4 points

In determining the optimal capital budget, one should choose those project’s whose _ exceeds the firm’s _ cost of capital.

· Question 22

4 out of 4 points

Which of the following would not be classified as a capital expenditure for decision-making purposes?

· Question 23

4 out of 4 points

In cost-effectiveness analysis, constant cost studies:

· Question 24

4 out of 4 points

Any current outlay that is expected to yield a flow of benefits beyond one year in the future is:

· Question 25

4 out of 4 points

Cost-benefit analysis is the public sector counterpart to __ used in private, profit-oriented firms.