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. Steel - autos - colas - airlines






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






3. 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






4. 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






5. 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






6. Price Sensitive






7. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends






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






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






10. Actions taken by firms to plan for and react to competition from rival firms






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






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






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






14. The practice of bundling several different products together and selling them at a single "bundle" price






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






16. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






17. 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






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






19. Produce identical products






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






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






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






23. 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






24. 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






25. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike






26. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






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






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






30. The price that is low enough to deter entry






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






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






33. A combination of two or more companies into one company






34. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






36. 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






37. 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






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






39. 1/(1+i)n






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






41. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade






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






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






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






45. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






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






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






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






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






50. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly