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. Toothpaste - shampoo - restaurants - banks






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






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






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






5. Takes Place inside the Mind of the consumer






6. 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






7. 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






8. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount






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






10. 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






11. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






13. 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






14. 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






15. Revenue-Costs






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






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






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






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






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






21. Price Sensitive






22. Identical or substitutable






23. 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






24. The situation when a firm's long-run average costs fall as it increases output






25. 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






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






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






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






29. Rules - strategies - payoffs - outcomes






30. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






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






34. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






36. Involves price-fixing






37. 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)






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






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






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






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






42. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






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






44. 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






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






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






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






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






49. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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