SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Business Competition
Start Test
Study First
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. The exclusive right to a product for a period of 20 years from the date the product is invented
Rothschild index
Patent
Payoff matrix
Contestable market
2. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Limit price
Sequential game
Reservation Price
Contestable market
3. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Monopoly (characteristics)
Tacit collusion
First-Degree Price Discrimination (Perfect)
Cross-subsidy pricing
4. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Payoff matrix
Peak-load pricing
Basis for Product Differentiation
Contestable market
5. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking
Sequential-move game
First-Degree Price Discrimination (Perfect)
Oligopoly
Perfect Competition Short Run Supply
6. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Maximizing profit in Oligopoly games
Payoff matrix
Non-rivalrous consumption
Cheating
7. If production of a good requires a particular input - then control of that input can be a barrier to entry
Common knowledge
Strategic behavior
Ownership of a Key Input
Rothschild index
8. First firm to set its output (Stackelberg's model)
Perfect Competitor Characteristics
Duopoly
Leader
No cooperative equilibrium
9. Keeps the price just where it is to maximize profit
Cutthroat Competition
Four-firm concentration ratio
Trigger strategy
Cooperative equilibrium
10. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Open Collusion
Natural Monopoly (local phone or electric company)
Product differentiation
Contestable market
11. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies
Perfect Competition (characteristics)
Joint Venture
Product differentiation
Subgame perfect equilibrium
12. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Conglomerate Merger
Bargaining Power of Buyers
Simultaneous-move game
Covert Collusion
13. 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
Dominant strategy
Second-Degree Price Discrimination
Mutual Interdependence
Patent
14. A situation in which a change in price strategy by one firm affects sales and profits of another
Indefinitely repeated game
Mutual interdependence
Natural Monopoly (local phone or electric company)
Bargaining Power of Suppliers
15. The competition for sales between the products of one industry and the products of another industry
Non-cooperative behavior
Basis for Product Differentiation
Inter-industry competition
Price war
16. 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
Rothschild index
Block pricing
Herfindahl-Hirschman index (HHI)
Basis for Product Differentiation
17. 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
Secure strategy
Perfect Competitor Characteristics
Cournot oligopoly
Dansby-Willig performance index
18. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
High Price Elasticity
Sweezy oligopoly
Disappearing invisible hand
Perfect Competition (characteristics)
19. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Randomized pricing
Dominant firm oligopoly
Undifferentiated
The Threat from Potential Entrants Firms
20. Long-run marginal cost curve above long-run average cost
Perfect Competitor Characteristics
Conglomerate Merger
Perfect Competition Long Run Supply
Simultaneous-move game
21. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
First-mover advantage
Open Collusion
Limit pricing
Trigger strategy
22. Takes Place inside the Mind of the consumer
Dominant strategy equilibrium
Product Differentiation
Sequential game
Brand Multiplication
23. Marginal cost curve above average variable cost - P* = SRMC
Simultaneous decision games
Cournot equilibrium
Perfect Competition Short Run Supply
Market
24. 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
Market
Prisoner's dilemma
Cournot oligopoly
Nash equilibrium
25. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Simultaneous decision games
Covert Collusion
Payoff table
Brand Multiplication
26. Face competition from companies that currently are not in the market but might enter
Stackelberg oligopoly
The Threat from Potential Entrants Firms
Market
Bargaining Power of Suppliers
27. 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
Prisoner's dilemma
Block pricing
Tacit collusion
Joint Venture
28. In game theory - a decision rule that describes the actions a player will take at each decision point
Sequential-move game
Inefficiency
Maximizing profit in Oligopoly games
Strategy
29. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased
Lerner index
Covert Collusion
Two-part pricing
Interdependence
30. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Business strategy
Product Differentiation
Disappearing invisible hand
31. An equilibrium in a game in which players cooperate to increase their mutual payoff
Cooperative equilibrium
Collusion
Credible threat
Vertical Merger
32. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Indefinitely repeated game
Competitive market
Prisoners' dilemma
Implicit Collusion
33. A strategy or action that always provides the best outcome no matter what decisions rivals make
Prisoner's dilemma
Dominant strategy
Dansby-Willig performance index
Natural Monopoly (local phone or electric company)
34. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Equilibrium
Cournot equilibrium
Empty threat
Vertical Merger
35. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Dansby-Willig performance index
Equilibrium
Nash equilibrium
Socially optimal price
36. Ignoring the effects of their actions on each others' profits
Non-cooperative behavior
Sequential-move game
Tacit collusion
Payoff
37. 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
Price matching
Disappearing invisible hand
Non-cooperative behavior
Dominant firm oligopoly
38. A situation in which no one wants to change his or her behavior
Disappearing invisible hand
Equilibrium
Block pricing
Non-cooperative equilibrium
39. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies
Maximizing profit in Oligopoly games
Bertrand oligopoly
Extensive-form game
Mutual Interdependence
40. 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
Cooperation
Dominant strategy equilibrium
Rothschild index
Follower
41. Demand line is above ATC curve
Strategy
Perfect Competitor Making a Profit
Repeated game
Natural Monopoly (local phone or electric company)
42. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Competitive market
Basis for Product Differentiation
Primary Sources of Monopolistic Power
Payoff table
43. The smallest quantity at which the average cost curve reaches its minimum
Limit price
Extensive-form game
Minimum efficient scale (full capacity)
Randomized pricing
44. 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
Merger
Examples of Monopolistic Competition
Homogenous oligopoly
Payoff table
45. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Inter-industry competition
Implicit Collusion
Interdependence
Joint Venture
46. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Unbalanced Oligopoly
No cooperative equilibrium
Indefinitely repeated game
Contestable market
47. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Inefficiency
Secure strategy
Conglomerate Merger
Third-Degree Price Discrimination
48. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
What is game?
Third-Degree Price Discrimination
Fair return price
Brand Multiplication
49. Produce identical products
Non-price competition
Payoff table
Barrier to entry
Perfect Competitor Characteristics
50. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Inter-industry competition
Common knowledge
Imperfect competition
Sequential game