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. If production of a good requires a particular input - then control of that input can be a barrier to entry






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






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






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






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






6. Involves price-fixing






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






8. 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"






9. A simpler way to operationalize first-degree price discrimination






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






11. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






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






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






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






15. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






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






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






18. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






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






20. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)






21. 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






22. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount






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






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






25. The reward received by a player in a game - such as the profit earned by an oligopolist






26. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






27. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






28. Rules - strategies - payoffs - outcomes






29. 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






30. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






31. 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)






32. When the decisions of two or more firms significantly affect each others' profits






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






34. An equilibrium in a game in which players cooperate to increase their mutual payoff






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






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






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






38. 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






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






40. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






41. All firms and individuals willing and able to buy or sell a particular product






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






43. Variations on one good so that a firm can increase market sharea






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






45. 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






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






47. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






48. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it






49. 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






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