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. Rules - strategies - payoffs - outcomes






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






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






4. The smallest quantity at which the average cost curve reaches its minimum






5. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






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






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






9. A situation in which no one wants to change his or her behavior






10. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






12. 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






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






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






15. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






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






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






18. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor






19. A situation in which neither firm has incentive to change its output given the other firm's output






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






21. Using advertising and other means to try to increase a firm's sales






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






23. 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






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






25. 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






26. 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

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27. A product's ability to satisfy a large number of consumers at the same time






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






29. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






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






31. A table that shows the payoffs for every possible action by each player for every possible action by the other player






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






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






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






35. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






36. When a manager makes a noncooperative decision






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






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






39. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






40. Face competition from companies that currently are not in the market but might enter






41. 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)






42. 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






43. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






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






45. Identical or substitutable






46. Takes Place inside the Mind of the consumer






47. Both players have dominant strategies and play them






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






49. 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






50. 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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