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


2. Steel - autos - colas - airlines






3. 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






4. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






5. 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






6. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade






7. 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)






8. 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






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






10. 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






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






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






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






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






15. 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"






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






17. 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






18. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






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






20. Keeps the price just where it is to maximize profit






21. A simpler way to operationalize first-degree price discrimination






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






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






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






25. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






26. 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






27. 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)






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






29. 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






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






31. 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






32. Rules - strategies - payoffs - outcomes






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






34. 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






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






36. 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






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






38. When the decisions of two or more firms significantly affect each others' profits






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






40. The price that is low enough to deter entry






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






42. Identical or substitutable






43. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level






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






45. 1/(1+i)n






46. 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






47. Revenue-Costs






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






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






50. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers