Test your basic knowledge |

Business Competition

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






2. Game in which each player makes decisions without knowledge of the other player's decisions






3. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






4. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






5. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






6. Ignoring the effects of their actions on each others' profits






7. Cooperation among firms that does not involve an explicit agreement






8. A situation in which neither firm has incentive to change its output given the other firm's output






9. Specific assets - Economies of scale - Excess capacity - Reputation effects






10. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






11. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






12. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






13. Operates like the alleged Mafia. Region division of the market among the firms in the industry






14. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






15. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






16. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






17. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






18. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






19. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






20. In game theory - a game that is played again sometime after the previous game ends






21. A firm whose price decisions are tacitly accepted and followed by others in the industry






22. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level






23. In game theory - a decision rule that describes the actions a player will take at each decision point






24. Actions taken by a firm to achieve a goal - such as maximizing profits






25. A situation in which no one wants to change his or her behavior






26. A product's ability to satisfy a large number of consumers at the same time






27. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






28. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






29. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






30. Long-run marginal cost curve above long-run average cost






31. Identical or substitutable






32. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






33. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






34. A strategy or action that always provides the best outcome no matter what decisions rivals make






35. Game in which one player makes a move after observing the other player's move






36. Using advertising and other means to try to increase a firm's sales






37. A strategy that guarantees the highest payoff given the worst possible scenario






38. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






39. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






40. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






41. A table that shows the payoffs for every possible action by each player for every possible action by the other player






42. A situation where one firm is able to provide a service at a lower cost than could several competing firms






43. The physical characteristics of the market within which firms interact






44. The smallest quantity at which the average cost curve reaches its minimum






45. A game that is played over and over again forever and in which players receive payoffs during each play of the game






46. Maximize economic profit by producing the quantity at which MC=MR






47. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






48. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






49. The practice of charging different prices to consumers for the same good or service






50. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way