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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. 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






2. 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






3. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






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






6. 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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7. The competition that domestic firms encounter from the products and services of foreign producers






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






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






10. Involves price-fixing






11. 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






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






13. Long-run marginal cost curve above long-run average cost






14. Demand line is above ATC curve






15. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






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






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






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






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






20. When a manager makes a noncooperative decision






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






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






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






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






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






26. 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






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






28. Produce identical products






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






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






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






32. In game theory - a decision rule that describes the actions a player will take at each decision point






33. 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






34. 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






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






36. 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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37. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






39. Actions taken by a firm to achieve a goal - such as maximizing profits






40. 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






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






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






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






44. Marginal cost curve above average variable cost - P* = SRMC






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






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






47. A situation in which a change in price strategy by one firm affects sales and profits of another






48. 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)






49. 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






50. 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