Business - Economics

' Content Week 16 Take Test: Exam II (part 1) ~

Take Test: Exam II (part 1)

Test Information

Description Due by 10pm eastern on Thursday, December 13, 2018

Instructions Mulfiple Attempts Not allowed. This test can only be taken once. Force Completion This test can be saved and resumed later.

t Question Completion Status:

QUESTION 1 4poinls Save Answer

Firms that buy inputs from suppliers have more bargaining power when:

Q A. the costs of switching suppliers are low

Q B. the suppliers sell highly differentiated products

O C. there are many other buyers in the market

Q D.lhey purchase a relatively small quantity of product

QUESTION 2 4poinls Save Answer

If a firm successfully differentiates its product from other products in the market, then we should expect the elasticity of demand for the differentiated product to become:

O A. retain the same elasticity of demand

O B. We do not have enough information to answer this question

O C. more elastic

O D. more inelastic

QUESTION 3 I 4poinls Save Answer

Which of the following factor does NOT contribute to higher rivalry in a market?

O A. Lrnv switching costs for buyers

O B. Fast growth in the market

O C. High fixed costs

O D. Large number of competitors

QUESTION 4 ', 4pofnts ,Save Answer

Movie theaters tend to charge higher ticket prices for evening and weekend shows. This implies that the demand for these tickets is relatively:

O A. necessary

O B. unresponsive to income changes

O C. elastic

O D.inelastic

QUESTION 5 ~~. 4poinls Save Answer

Recently, Quandl announced that they were purchased by NASDAQ. Both fines provide historic market data and other information about exchange Vansactions in equity and futures markets, so they offer substitute products. After the merger is completed, we should expect that the price of these market data products offered by the combined firm will:

O A. decline

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Take Test: Exam II (part 1) — 2018 FALL MAIN Managerial ... Page 2 of 5

remain unchanged

~ D. increase

QUESTION 6 l

4points SaveAnswer

Suppose the marginal cost to produce Apple iPhones is $400 per phone. Initially, the elasticity of demand for the iPhone is -2 when the product has no close substitutes. As other smart phones enter the market place, the elasticity of demand for iPhones changes to -3. If Apple is setting prices to maximize profits, how much should the iPhone price decline in response to the entry by competing phones?

Q A. $200

O B. $300

Q C. $400

O D. $600

QUESTION 7 ~ 4points SaveAnswer

To successfully adapt a pdce discrimination strategy, the seller must:

O A. offer distinct products for each separate pricing group

O s. be able to identify the willingness to pay for each individual customer

O C. be able to prevent resale between buying groups

Q D. be able to know which customers belong to fhe different pricing groups

QUESTION 8 4points i, Save Answer

Which group is offered the lower price under a price discrimation scheme?

O A. Elastic demand group

O B.Inelastic demand group

QUESTION 9 4points (SaveAnswer i

The remaining consumer surplus is zero under a successful first-degree price discrimination scheme.

Q True

O False

QUESTION 10 4points SaveAnswer

In general, women's Gothing items (e.g., running shoes) have higher prices than comparable products designed for men due to price discrimination. How do the Gothing sellers prevent resale in these markets?

State censumer protection laws prohibit selling goods intended for one group to members of ~ A the other group

The retailers are prohibited from selling products intended for one group to members of the ~ e'othergroup

Q C. Price discrimination is not possible in clothing markets

O D. The clothing products are differentiated by styling or design features

QUESTION 11 4points SaveAnswer

Which of the following claims is NOT true?

O A. If arbitrage between customers is possible, the seller should offer uniform prices

Q B. Volume discounts are not a form of price discdmination

Bundling is profitable if the willingness to pay for the bundle is more homogeneous than the ~ C'willingness to pay for the bundle components

Price discrimination is feasible if the costs of arbitrage exceed the difference in prices charged ~ D'to the different customers

QUESTION 12 ~ 4points SaveAnswer

Metering is a type of direct price discrimination. ~ Tme

Q False

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QUESTION 13 4points Save Ansvrer

The joint payoffs to both players in a prisoners' dilemma would be higher if the players could collude. Q True Q False

QUESTION 14 4points Save Answer

Which of the following statements is true?

Q A. Players take actions that maximize theirjoinl profits under a Nash equilibrium

Q B. One of the players must have afirst-mover advantage in a two-player sequenfial game

O C. Nash equilibria are only defined for repeated games

Q D. There maybe no unique Nash equilibrium to atwo-player simultaneous game.

OUESTION 15 4points Save Ansvrer

Please refer to the game associated with Multiple Choice ques8on 8 in Chapter 15. If the low price / low price payoffs for both players are 30 (instead of 0), is this game a prisoners' dilemma?

Q A. Yes

Qe.No

QUESTION 16 4points Save Answer

Please refer to the two-player simultaneous game in Multiple Choice question 3 in Chapter 16. How many pure strategy Nash equilibria does this game have?

Q A. 0

Q 8.1

Q C.2

Q D.3

QUESTION 17 4points Save Ansvrer

Sonny and Cher were a popular singing duo in the 1970's. Affer establishing their success in the music business, they met to decide how future eamings should be split among the two partners. Together, they could eam 55 million per year from their music act. Separately, Cher could eam 51 million as an acfress, and Sonny did not have any outside options for employment. How much of the 55 million joint eamings should be paid to Cher?

Q A. 51 million

Q e. 52 millicn

Q C. 52.5 million

Q D.53 million

QUESTION 18 4points Save Answer

For threats or commitments in a game to be effective, they must be:

Q A. credible

Q B. irrational

Q C. ethical

Q D. None of the above

QUESTION 19 4points 'Save Answer

The prospects for success facing your startup are risky: there is a 0.5 probability that you lose 51 million, 0.2 probability that you break even, and 0.3 probability that you make 55 million. What is the expected return from the startup?

Q A. Lose 51 million

Q B. Break even

Q C.Gain 51 million

O D. Gain 51.5 million

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Take Test: Exam II (part 1) — 2018 FALL MAIN_Managerial ... Page 4 of 5

4points Save Answer

Your ad agency advises you that the new email marketing campaign that they designed is expected to O A. 150 have 0.3% of the messages opened. Then, 10% of the recipients who open the email message with click through to your website. If you send the email marketing message l0 500,000 people in the first O 8.1500 round, what is the expected number of people who will visit your website?

O C. 15000

Q D. 100000

QUESTION 21 4points Save Answer

Which type of randomness can be fully described by a probability distribution?

O A. Risk

O B. Uncertainty

Q C. Both of the above

Q D.None ofthe above

QUESTION 22 4points Save Answer

Which of the following statements is NOT true?

O A. The outcomes from Vckrey auctions are identical to first-price sealed bid auctions

O B. English auctions are also known as oral auctions

O C.Oral auctions are also second-price auctions

O D. Common value auctions are subject to the winners curse

QUESTION 23 4points Save Answer

The prices achieved by common-value auctions lend to increase as more information is provided to buyers.

O True

Q False

QUESTION 24 4 points Save Answer

There are five buyers al an online book auction with willingness to pay {520, 525, 530, 53D, 540}. What is the likely value of the winning bid?

Q A. Just over 525

O B. Just over 530

O C.Justover535

O D. Just under 540

QUESTION 25 ~ 4points Save Answer ~~

In a situation subject to asymmefdc information, which party should use the screening techniques?

O A. Neither party should use screens

O B. Mare informed party

O C. We do not have enough information to answer this question

p D. Less informed party

QUESTION 26 4points Save Answer

Which of the following actions can be an example of a signal designed to reduce the impact of asymmetric information?

O A.A money-back guarantee

O B. Students pursue graduate training

O C. Students take an unpaid internship

O D. All of the above

QUESTION 27 4points ~ Save Answer

A business owner attains a bank loan to purchase a new delivery truck for the business, but they use the funds to take a vacation to Australia. Which of the following terms describes the problem with this situation?

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Moral hazard

O C. Both moral hazard and adverse selection

Q D. There is not a problem with this situation

QUESTION 28 4points I Save Answer

Firms that hire outside wnsultants can reduce the impact of moral hazard by:

O A. hidng work on a fixed-fee basis

O B. monitoring the quality of the completed work

Q C. hiring consultants with an established reputation for not shirking

Q D. All of the above

QUESTION 29 4 points Save Answer

Please refer to Individual Problem 205 in Chapter 20. If the client pays the cost for Form A for all forms processed, what is the average gain or Toss earned across all forms processed?

Q A. Lose 50.10 per form

O B. Break even

Q C. Gain 50.10 per form

Q D. Gain 50.15 per form

QUESTION 30 4points Save Answer

Which of the following statements about moral hazard is true?

O A. Moral hazard arises from actions that cannot be observed

O B. Shirking is a form of moral hazard

O C. Moral hazard involves taking excessive risk

Q D. All of the above

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