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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 actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Rent-seeking behavior
Patent
Joint Venture
Perfect Competitor Characteristics
2. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Mixed (randomized) strategy
Cooperation
Transfer pricing
Network effects
3. Using advertising and other means to try to increase a firm's sales
Reservation Price
Non-price competition
Strategic behavior
Empty threat
4. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Import competition
Herfindahl-Hirschman index (HHI)
Implicit Collusion
Cooperation
5. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Perfect Competition (characteristics)
Barrier to entry
Randomized pricing
Marginal Revenue
6. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Monopolistic Characteristics:
Dominant strategy equilibrium
Normal-form game
Extensive-form game
7. Cooperation among firms that does not involve an explicit agreement
Bertrand oligopoly
Non-price competition
Tacit collusion
The Threat from Potential Entrants Firms
8. 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
Mutual Interdependence
Examples of Monopolistic Competition
Subgame perfect equilibrium
Brand Multiplication
9. Increases in the value of a product to each user - including existing users - as the total number of users rises
Herfindahl-Hirschman index (HHI)
Network effects
Price war
Non-price competition
10. 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
Reservation Price
Merger
Market Structure
11. 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
Pure monopoly
Nonprime competition
Finding profit for oligopoly games
Ownership of a Key Input
12. 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
Peak-load pricing
Block pricing
Kinked-demand curve
Leader
13. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Finding profit for oligopoly games
Business strategy
Bertrand oligopoly
14. The exclusive right to a product for a period of 20 years from the date the product is invented
Secure strategy
Finding profit for oligopoly games
Patent
Bargaining Power of Buyers
15. A strategy or action that always provides the best outcome no matter what decisions rivals make
Dominant strategy
Inefficiency
Sweezy oligopoly
Cooperative equilibrium
16. Demand line is above ATC curve
Brand Multiplication
Perfect Competitor Making a Profit
Strategic behavior
Mixed (randomized) strategy
17. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Dansby-Willig performance index
Nonprime competition
Non-price competition
First-Degree Price Discrimination (Perfect)
18. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Contestable market
Third-degree price discrimination
Repeated game
Simultaneous decision games
19. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Limit price
Tit-for-tat strategy
Cutthroat Competition
Patent
20. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Inefficiency
Competitive market
Examples of Monopolistic Competition
Third-Degree Price Discrimination
21. A product's ability to satisfy a large number of consumers at the same time
Simultaneous consumption
Ownership of a Key Input
Finding profit for oligopoly games
Non-rivalrous consumption
22. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Sweezy oligopoly
Perfect Competitor Making a Profit
Non-cooperative behavior
Empty threat
23. Identical or substitutable
Sequential game
Four-firm concentration ratio
Herfindahl-Hirschman index (HHI)
Undifferentiated
24. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
First-mover advantage
Perfect Competition (characteristics)
Rent-seeking behavior
Basis for Product Differentiation
25. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Cournot oligopoly
Simultaneous decision games
Primary Sources of Monopolistic Power
Nash equilibrium
26. Actions taken by firms to plan for and react to competition from rival firms
Strategic behavior
Perfect Competitor Characteristics
Perfect Competition Barriers to Entry
Price discrimination
27. The price that is low enough to deter entry
Limit price
Reservation Price
Subgame perfect equilibrium
Two-part Tariff Method of Pricing
28. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player
Sweezy oligopoly
Normal-form game
Ownership of a Key Input
Trigger strategy
29. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Payoff matrix
Rothschild index
Cutthroat Competition
Business strategy
30. 1/(1+i)n
Present Value (PV)
Cournot equilibrium
First-Degree Price Discrimination (Perfect)
Market Structure
31. The smallest quantity at which the average cost curve reaches its minimum
Cooperation
Minimum efficient scale (full capacity)
Brand Multiplication
Cheating
32. Keeps the price just where it is to maximize profit
Market
Cooperation
Cutthroat Competition
Non-cooperative behavior
33. An equilibrium in a game in which players cooperate to increase their mutual payoff
Four-firm concentration ratio
Extensive-form game
Randomized pricing
Cooperative equilibrium
34. 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
35. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Dansby-Willig performance index
Repeated game
Covert Collusion
36. First firm to set its output (Stackelberg's model)
Extensive-form game
Leader
Tacit collusion
Indefinitely repeated game
37. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs
Dominant strategy
Contestable market
Cournot equilibrium
Leader
38. 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
Sequential-move game
Dominant firm oligopoly
Fair return price
One-shot game
39. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
High Price Elasticity
Product differentiation
Price matching
Sweezy oligopoly
40. 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
Kinked-demand curve
Interdependence
Extensive-form game
Business strategy
41. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Payoff matrix
Price matching
Bargaining Power of Suppliers
Cutthroat Competition
42. Rules - strategies - payoffs - outcomes
What is game?
Bargaining Power of Suppliers
Sequential-move game
Contestable market
43. Simultaneous move game that is not repeated
Monopolistic Characteristics:
Repeated game
Concentration Ratio
One-shot game
44. Actions taken by a firm to achieve a goal - such as maximizing profits
Business strategy
Price Leadership
Limit pricing
Bargaining Power of Buyers
45. 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)
Disappearing invisible hand
Monopolistic Competition
Four-firm concentration ratio
Competitive market
46. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Third-Degree Price Discrimination
Bargaining Power of Suppliers
Examples of Monopolistic Competition
Subgame perfect equilibrium
47. 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
Product Differentiation
Competitive market
Tacit collusion
High Price Elasticity
48. When the decisions of two or more firms significantly affect each others' profits
Finding profit for oligopoly games
Undifferentiated
Open Collusion
Interdependence
49. 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
Brand Multiplication
Product differentiation
Bertrand oligopoly
Market
50. Price Sensitive
Stackelberg oligopoly
Perfect Competition Barriers to Entry
High Price Elasticity
Disappearing invisible hand