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






2. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






3. Rival who sets its output after the leader (Stackelberg's model)






4. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






5. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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






7. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






8. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






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






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






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






12. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






13. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services






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






15. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






16. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






17. The competition that domestic firms encounter from the products and services of foreign producers






18. Rules - strategies - payoffs - outcomes






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






20. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears






21. The competition for sales between the products of one industry and the products of another industry






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






23. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






24. Marginal cost curve above average variable cost - P* = SRMC






25. When managers are able to charge each consumer their reservation price. Examples are car and home sales






26. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






27. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






28. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






29. Simultaneous move game that is not repeated






30. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






31. The exclusive right to a product for a period of 20 years from the date the product is invented






32. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






33. 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"






34. 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






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






36. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






37. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry






38. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






39. Steel - autos - colas - airlines






40. Increases in the value of a product to each user - including existing users - as the total number of users rises






41. First firm to set its output (Stackelberg's model)






42. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






43. In game theory - benefit obtained by party that moves first in a sequential game






44. An oligopoly in which the firms produce a differentiated product






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






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






47. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






48. Single firm is sole producer of a product for which there are no close substitutes






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






50. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)