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The concept of market structure refers to three main characteristics of buyers and sellers
in a particular market. These include ____.
a. the degree of seller and buyer concentration in the market
b. the degree of actual or imagined differentiation between the products or services of
competing producers
c. the pricing behavior of the firms
d. a and b
e. a, b, and c
Which of the following barometric indicators would be the most helpful for forecasting
future sales for an industry?
a. lagging economic indicators.
b. leading economic indicators.
c. coincident economic indicators.
d. wishful thinking
e. none of the above
An closest example of a risk-free security is
a. General Motors bonds
b. AT&T commercial paper
c. U.S. Government Treasury bills
d. San Francisco municipal bonds
e. an I.O.U. that your cousin promises to pay you $100 in 3 months
An example of a time series data set is one for which the:
a. data would be collected for a given firm for several consecutive periods (e.g.,
months).
b. data would be collected for several different firms at a single point in time.
c. regression analysis comes from data randomly taken from different points in time.
d. data is created from a random number generation program.
d. use of regression analysis would impossible in time series.
Which of the following statements concerning the shareholder wealth maximization
model is (are) true?
a. The timing of future profits is explicitly considered.
b. The model provides a conceptual basis for evaluating differential levels of risk.
c. The model is only valid for dividend-paying firms.
d. a and b
e. a, b, and c
Marginal factor cost is defined as the amount that an additional unit of the variable
input adds to ____.
a. marginal cost
b. variable cost
c. marginal rate of technical substitution
d. total cost
e. none of the above
The method which can give some information in estimating demand of a product that
hasn€t yet come to market is:
a. the consumer survey
b. market experimentation
c. a statistical demand analysis
d. plotting the data
e. the barometric method
An incentive-compatible mechanism for revealing true willingness to pay in a private
value auction is
a. impossible
b. a Dutch auction
c. a second-highest sealed bid auction
d. a sequential auction with open bidding
e. a discriminatory price all-or-nothing auction.
The variation in an economic time-series which is caused by major expansions or
contractions usually
of greater than a year in duration is known as:
a. secular trend
b. cyclical variation
c. seasonal effect
d. unpredictable random factor
e. none of the above
A firm has determined that its variable costs are given by the following relationship: VC
= .05Q3- 5Q2+ 500Q where Q is the quantity of output produced. (a) Determine the
output level where average variable costs are minimized.
(b) Determine the output level where marginal costs are minimized.
The Herfindahl-Hirschman index (also shortened to just the Herfindahl index) is a
measure of ____.
a. market concentration
b. income distribution
c. technological progressiveness
d. price discrimination
e. none of the above
Exhibit 13-1
Consider the information below when answering the following question(s):
(Note: Payoffs in the upper right corner go to Pizza Spinners and payoffs in the lower
left go to Harry's).
In choosing whether to deliver to six or seven neighborhoods, Pizza Spinners has to
take into account not only its own costs, but also the delivery area response of its
competitor Harry's Pizzeria. If the payoffs per week from delivering in six and seven
neighborhoods are as displayed in the exhibit above, what will Pizza Spinner's choose
and why?
Direct costs of a public sector investment project are generally easier to measure than
the direct benefits.
a. true
b. false
The difference between cooperative and non-cooperative games is
a. cooperative games allow side payments to support collusion
b. non-cooperative games encourage communication of sensitive information between
arms-length competitors
c. cooperative games involve randomized behavior
d. cooperative games necessitate an explicit order of play
e. inconsequential except when players have contractual relationships
