To escape adverse selection and elicit high quality experience goods buyers can
a. offer price premiums to new firms in the market
b. seek out unbranded goods
c. buy from generic storefronts that have leased temporary space
d. secure warranties from warehouse retailers
e. none of the above
The combinations of inputs costing a constant C dollars is called:
a. an isocost line
b. an isoquant curve
c. the MRTS
d. an isorevenue line
e. none of the above
If the cross price elasticity measured between items A and B is positive, the two
products are referred to as:
a. complements
b. substitutes
c. inelastic as compared to each other
d. both b and c
e. a, b, and c
Seasonal variations can be incorporated into a time-series model in a number of
different ways, including:
a. ratio-to-trend method
b. use of dummy variables
c. root mean squared error method
d. a and b only
e. a, b, and c
A Dutch auction implies all of the following except
a. more than one unit sale available
b. higher prices later in the auction
c. identical expected seller revenue for common value items
d. greater expected seller revenue in estate sales with risk-averse bidders
A cottage industry exists in the home-manufacture of “country crafts”. Especially
treasured are handmade quilts. If the fourth completed quilt took 30 hours to make, and
the eighth quilt took 28 hours. What is the percentage learning? Hint: Percentage
learning = 100% – (c2/c1)’¢100%.
a. 5%
b. 6.7%
c. 10%
d. 100%
e. 122%
Which of the following is not an assumption of the linear breakeven model:
a. constant selling price per unit
b. decreasing variable cost per unit
c. fixed costs are independent of the output level
d. a single product (or a constant mix of products) is being produced and sold
e. all costs can be classified as fixed or variable
In the linear breakeven model, a firm incurs operating losses whenever output is less
than the breakeven level.
a. true
b. false
The forecasting technique which attempts to forecast short-run changes and makes use
of economic indicators known as leading, coincident or lagging indicators is known as:
a. econometric technique
b. time-series forecasting
c. opinion polling
d. barometric technique
e. judgment forecasting
Second-degree price discrimination:
a. is also known as block rate setting
b. is imperfect in the eyes of a monopolist
c. is regularly practiced by public utilities
d. is effective only in the case of services or products which are sold in easily metered
units
e. all of the above
All of the following except ____ are shortcomings of cost-benefit analysis.
a. difficulty in measuring third-party costs
b. difficulty in measuring third-party benefits
c. failure to consider the time value of benefits and costs
d. difficulty of accounting for program interactions
e. a and b
Regulatory agencies engage in all of the following activities except _______.
a. controlling entry into the regulated industries
b. overseeing the quality of service provided by the firms
c. setting federal and state income tax rates on regulated firms
d. setting prices that consumers will pay
e. none of the above
In ____ 2-person, nonzero-sum games there is no communication between the
participants and no way to enforce agreements.
a. noncooperative
b. cooperative
c. a and b
d. none of the above
The weights used in calculating the firm’s weighted-average cost of capital are equal to
the proportion of debt and equity ____.
a. used to finance the project
b. used to finance the projects undertaken last year
c. in the industry average capital structure
d. in the firm’s target capital structure
e. none of the above
An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will
increase by ____.
a. one percent; quantity supplied; two units
b. one unit; quantity supplied; two units
c. one percent; quantity demanded; two percent
d. one unit; quantity demanded; two units
e. ten percent; quantity supplied; two percent
The segmenting of customers into several small groups such as household, institutional,
commercial, and industrial users, and establishing a different rate schedule for each
group is known as:
a. first-degree price discrimination
b. market penetration
c. third-degree price discrimination
d. second-degree price discrimination
e. none of the above
In adopting mixed Nash equilibrium strategy, a player is attempting to
a. randomize his or her own behavior
b. make the opponent favor a course of action preferred by the first player
c. randomize the outcome of actions
d. make the opponent indifferent between one action and another
e. none of the above