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






3. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






4. 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)






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






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






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






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






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






10. 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






11. Both players have dominant strategies and play them






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






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






14. 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






15. 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






16. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






18. The price that is low enough to deter entry






19. 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






20. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






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






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






23. 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






24. The practice of bundling several different products together and selling them at a single "bundle" price






25. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






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






27. When a manager makes a noncooperative decision






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






29. 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






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






31. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






32. Demand line is above ATC curve






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






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






35. Steel - autos - colas - airlines






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






37. Simultaneous move game that is not repeated






38. 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






39. 1/(1+i)n






40. The derivative of total revenue






41. Toothpaste - shampoo - restaurants - banks






42. Produce identical products






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






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






45. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






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






48. 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






49. 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






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