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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. An equilibrium in a game in which players cooperate to increase their mutual payoff
Prisoner's dilemma
Cooperative equilibrium
Strategy
Secure strategy
2. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Two-part Tariff Method of Pricing
Cooperative equilibrium
Third-degree price discrimination
Follower
3. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Non-cooperative equilibrium
Simultaneous-move game
Third-Degree Price Discrimination
Covert Collusion
4. The derivative of total revenue
Marginal Revenue
Unbalanced Oligopoly
Equilibrium
Cournot equilibrium
5. 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
Competitive market
Equilibrium
Simultaneous consumption
Inefficiency
6. Involves price-fixing
One-shot game
First-Degree Price Discrimination (Perfect)
Covert Collusion
Sequential game
7. 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
Sequential game
Sweezy oligopoly
Marginal Revenue
8. The price that is low enough to deter entry
Natural Monopoly (local phone or electric company)
Bertrand oligopoly
Monopoly (characteristics)
Limit price
9. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Transfer pricing
Duopoly
Merger
Open Collusion
10. 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
Monopolistic Competition
Payoff
Differentiated oligopoly
Price Leadership
11. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Finding profit for oligopoly games
Payoff matrix
Simultaneous-move game
Tit-for-tat strategy
12. A simpler way to operationalize first-degree price discrimination
Dominant strategy
Reservation Price
Two-part Tariff Method of Pricing
Bertrand oligopoly
13. Game in which one player makes a move after observing the other player's move
Extensive-form game
Barrier to entry
Brand Multiplication
Sequential-move game
14. 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
Follower
Interdependence
Nash equilibrium
Joint Venture
15. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Second-Degree Price Discrimination
Vertical Merger
Bargaining Power of Suppliers
16. Toothpaste - shampoo - restaurants - banks
Monopoly (characteristics)
Examples of Monopolistic Competition
Fair return price
Perfect Competition (characteristics)
17. If production of a good requires a particular input - then control of that input can be a barrier to entry
What is game?
Cross-subsidy pricing
Two-part Tariff Method of Pricing
Ownership of a Key Input
18. 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
Non-cooperative equilibrium
Disappearing invisible hand
Perfect Competition Short Run Supply
Dominant strategy equilibrium
19. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Payoff matrix
Minimum efficient scale (full capacity)
Bargaining Power of Buyers
Product differentiation
20. 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
Contestable market
Two-part pricing
Import competition
Rent-seeking behavior
21. Actions taken by firms to plan for and react to competition from rival firms
Strategic behavior
Sequential-move game
Contestable market
Two-part pricing
22. Long-run marginal cost curve above long-run average cost
Vertical Merger
Two-part Tariff Method of Pricing
Perfect Competition Long Run Supply
No cooperative equilibrium
23. A product's ability to satisfy a large number of consumers at the same time
Price discrimination
Four-firm concentration ratio
The Threat from Potential Entrants Firms
Simultaneous consumption
24. Cooperation among firms that does not involve an explicit agreement
Import competition
What is game?
Repeated game
Tacit collusion
25. Keeps the price just where it is to maximize profit
Cutthroat Competition
Finding profit for oligopoly games
Dominant firm oligopoly
Network effects
26. 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
Cheating
Merger
Bertrand oligopoly
Business strategy
27. 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
Rothschild index
Non-cooperative equilibrium
Two-part Tariff Method of Pricing
Normal-form game
28. The reward received by a player in a game - such as the profit earned by an oligopolist
Cutthroat Competition
Profit
Payoff
Barrier to entry
29. A strategy or action that always provides the best outcome no matter what decisions rivals make
Product differentiation
Tacit collusion
Profit
Dominant strategy
30. 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
Import competition
Herfindahl-Hirschman index (HHI)
Block pricing
Stackelberg oligopoly
31. 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
Imperfect competition
Undifferentiated
Disappearing invisible hand
Rothschild index
32. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Strategy
Tacit collusion
Reservation Price
Non-cooperative equilibrium
33. 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
Perfect Competitor Making a Profit
Socially optimal price
Examples of Monopolistic Competition
Second-Degree Price Discrimination
34. In game theory - benefit obtained by party that moves first in a sequential game
Peak-load pricing
First-mover advantage
Natural Monopoly (local phone or electric company)
Limit pricing
35. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Import competition
Undifferentiated
Network effects
Fair return price
36. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Payoff matrix
Strategy
Socially optimal price
Network effects
37. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Herfindahl-Hirschman index (HHI)
Bargaining Power of Suppliers
First-Degree Price Discrimination (Perfect)
Normal-form game
38. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Four-firm concentration ratio
Maximizing profit in Oligopoly games
Monopolistic Competition
Peak-load pricing
39. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Concentration Ratio
Secure strategy
Third-degree price discrimination
40. 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
Equilibrium
Collusion
Dominant strategy
Two-part pricing
41. The physical characteristics of the market within which firms interact
Third-degree price discrimination
Herfindahl-Hirschman index (HHI)
Market Structure
Dominant strategy equilibrium
42. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Concentration Ratio
Kinked-demand curve
First-Degree Price Discrimination (Perfect)
Credible threat
43. In game theory - a game that is played again sometime after the previous game ends
Block pricing
Prisoner's dilemma
Repeated game
Randomized pricing
44. 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
Mutual Interdependence
Finding profit for oligopoly games
Undifferentiated
Common knowledge
45. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Transfer pricing
Economies of scale
Vertical Merger
Payoff matrix
46. 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
Dansby-Willig performance index
Kinked-demand curve
Conglomerate Merger
Cooperation
47. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Sequential game
Market
Herfindahl-Hirschman index (HHI)
Cournot equilibrium
48. The practice of bundling several different products together and selling them at a single "bundle" price
Non-price competition
Economies of scale
Stackelberg oligopoly
Commodity bundling
49. Game in which each player makes decisions without knowledge of the other player's decisions
Simultaneous-move game
Limit pricing
Barrier to entry
Payoff matrix
50. Demand line is above ATC curve
Prisoner's dilemma
Concentration Ratio
Perfect Competitor Making a Profit
High Price Elasticity