ECO550 Final Part 1 & 2 Latest 2017(100% Answer)

PART 1Question 10 out of 4 pointsEvidence from empirical studies of long-run cost-output relationships lends support to the:a. existence of a non-linear cubic total cost functionb. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firmc. hypothesis that total costs increase quadratically over the ranges of output examinedd. hypothesis that total costs increase linearly over some considerable range of output examinede. none of the aboveQuestion 20 out of 4 pointsThe short-run cost function is:a. where all inputs to the production process are variableb. relevant to decisions in which one or more inputs to the production process are fixedc. not relevant to optimal pricing and production output decisionsd. crucial in making optimal investment decisions in new production facilitiese. none of the aboveQuestion 30 out of 4 pointsWhich of the following is not an assumption of the linear breakeven model:a. constant selling price per unitb. decreasing variable cost per unitc. fixed costs are independent of the output leveld. a single product (or a constant mix of products) is being produced and solde. all costs can be classified as fixed or variableQuestion 44 out of 4 pointsA ____ total cost function implies that marginal costs ____ as output is increased.a. linear; increase linearlyb. quadratic; increase linearlyc. cubic; increase linearlyd. a and be. none of the aboveQuestion 54 out of 4 pointsBreak-even analysis usually assumes all of the following except:a. in the short run, there is no distinction between variable and fixed costs. b. revenue and cost curves are straight-lines throughout the analysis.c. there appears to be perfect competition since the price is considered to remain the same re-gardless of quantity.d. the straight-line cost curve implies that marginal cost is constant.e. both c and dQuestion 64 out of 4 pointsIn the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by:a. one minus the variable cost ratiob. contribution margin per unitc. selling price per unitd. standard deviation of unit salese. none of the aboveQuestion 74 out of 4 pointsThe main difference between perfect competition and monopolistic competition is:a. the number of sellers in the market.b. the ease of exit from the market.c. the difference in the firm's profits in the long run.d. the degree of product differentiation.e. Whether it is the short run or the long runQuestion 84 out of 4 pointsExperience goods are products or servicesa. that the customer already knowsb. whose performance is highly unusualc. whose quality is undetectable when purchasedd. not likely to cause repeat purchasese. all of the aboveQuestion 94 out of 4 pointsUncertainty includes all of the following except ____.a. unknown effects of deliberate actionsb. incomplete information as to the type of competitorc. random disturbancesd. unverifiable claimse. accidents due to weather hazardsQuestion 104 out of 4 pointsUnder asymmetric information,a. you never get what you pay forb. you sometimes get cheatedc. you always get cheatedd. at best you get what you pay fore. sellers make profits in excess of competitive returnsQuestion 114 out of 4 pointsA "search good" is:a. One that depends on how the product behaves over timeb. A product whose quality is only found out over time by finding how durable it isc. Like a peach that can be examined for flawsd. Like a used car, since it is easy to determine its inherent qualitye. None of the aboveQuestion 124 out of 4 pointsIf price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.a. more; decrease; downb. more; decrease; upc. more; increase; downd. more; increase; upe. none of the aboveQuestion 134 out of 4 pointsThe price for used cars is well below the price of new cars of the same general quality. This is an example of:a. The Degree of Operating Leverageb. A Lemon's Marketc. Redeployment Assetsd. Cyclical Competitione. The Unemployment RateQuestion 144 out of 4 pointsThe demand curve facing the firm in ____ is the same as the industry demand curve.a. pure competition b. monopolistic competition c. oligopoly d. pure monopoly e. none of the aboveQuestion 154 out of 4 pointsDeclining cost industriesa. have upward rising AC curves. b. have upward rising demand curves. c. have -shaped total costs. d. have diseconomies of scale. e. have marginal cost curves below their average cost curveQuestion 164 out of 4 pointsIn natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale. If price were set equal to marginal cost, then:a. price would equal average cost.b. price would exceed average cost.c. price would be below average cost.d. price would be at the profit maximizing level for natural monopolye. all of the aboveQuestion 174 out of 4 pointsThe practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:a. inverted block pricingb. second-degree price discriminationc. peak-load pricingd. first-degree price discriminatione. none of the aboveQuestion 184 out of 4 pointsIn the electric power industry, residential customers have relatively ____ demand for electricity compared with large industrial users. But contrary to price discrimination, large industrial users generally are charged ____ rates.a. similar, similar b. elastic, lower c. elastic, higher d. inelastic, lowere. inelastic, higherQuestion 194 out of 4 points____ as practiced by public utilities is designed to encourage greater usage and therefore spread the fixed costs of the utility's plant over a larger number of units of output.a. Peak load pricingb. Inverted block pricingc. Block pricingd. First degree price discriminatione. None of the aboveQuestion 204 out of 4 points“Conscious parallelism of action” among oligopolistic firms is an example of ____.a. intense rivalryb. a formal collusive agreementc. informal, or tacit, cooperationd. a cartele. none of the aboveQuestion 214 out of 4 pointsBarometric price leadership exists whena. one firm in the industry initiates a price change and the others follow it as a signal of changes in cost or demand in the industry.b. one firm imposes its best price on the rest of the industry.c. all firms agree to change prices simultaneously.d. one company forms a price umbrella for all others.e. the firms are all colludingQuestion 224 out of 4 pointsIf a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical.a. average total costb. average profitc. marginal profitd. marginal coste. marginal revenueQuestion 234 out of 4 pointsA(n) ____ is characterized by a relatively small number of firms producing a product.a. monopolyb. syndicatec. cooperatived. oligopolye. none of the aboveQuestion 244 out of 4 pointsIn a kinked demand market, whenever one firm decides to lower its price,a. other firms will automatically follow.b. none of the other firms will follow.c. one half of the firms follow and one half of the firms don't follow the price cut.d. other firms all decide to exit the industrye. all of the other firms raise their prices.Question 254 out of 4 pointsIn the Cournot duopoly model, each of the two firms, in determining its profit-maximizing price-output level, assumes that the other firm's ____ will not change.a. priceb. outputc. marketing strategyd. inventorye. none of the above

PART 2 Question 14 out of 4 pointsConsider the game known as the Prisoner's Dilemma. What's the dilemma?a. By both not confessing, both get to the cooperative solution and minimize time in prison.b. By both confessing, both get to the noncooperative solution and both serve significant time in prison.c. As a group, they are better off cooperating by not confessing, but each player has an incentive to be first to confess in a double cross.d. The problem is that the spies should never have been caught; they should move to Rio.Question 24 out of 4 pointsCooperation in repeated prisoner's dilemma situations seems to be enhanced by all of the following excepta. limited punishment schemes b. clarity of conditional rewards c. grim trigger strategy d. provocability-- i.e ., credible threats of punishment e. tit for tat strategyQuestion 34 out of 4 pointsCredibility in threats and commitments in sequential games is based ona. randomizing one's actions so they are unpredictableb. explicit communications with competitorsc. effective scenario planningd. analyzing best reply responsese. none of the aboveQuestion 44 out of 4 pointsWhen there is no Equilibrium (or no Nash Equilibrium), we expect that:a. the firms end up in the cooperative strategy.b. a firm will follow a randomized strategy.c. a firm will not care what it does.d. a firm will very likely have a dominant strategy.Question 54 out of 4 pointsCredible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except whena. the promisor is better off fulfilling than ignoring his promiseb. neither party has a prior dominant strategyc. the hostage can be revoked for just causesd. the hostage is more valuable than any given exchangee. the hostage is difficult to replaceQuestion 64 out of 4 pointsWhich of the following pricing policies best identifies when a product should be expanded, maintained, or discontinued?a. full-cost pricing policyb. target-pricing policyc. marginal-pricing policyd. market-share pricing policye. markup pricing policyQuestion 74 out of 4 pointsThird-degree price discrimination exists whenever:a. the seller knows exactly how much each potential customer is willing to pay and will charge accordingly. b. different prices are charged by blocks of services. c. the seller can separate markets by geography, income, age, etc ., and charge different prices to these different groups. the seller will bargain with buyers in each of the markets to obtain the best possible price.Question 84 out of 4 pointsFirms that have a cover charge for their customers and charge for each item they purchase as well are exhibitinga. universal access price discrimination b. declining block price discrimination. c. mixed bundling price discrimination. d. two-part price discrimination. e. uniform pricing Question 94 out of 4 pointsThe 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 discriminationb. market penetrationc. third-degree price discriminationd. second-degree price discriminatione. none of the aboveQuestion 104 out of 4 points____ is the price at which an intermediate good or service is transferred from the selling to the buying division within the same firm.a. Incremental price b. Marginal price c. Full-cost price d. Transfer price e. none of the aboveQuestion 114 out of 4 pointsWhen someone contracts to do a task but fails to put full effort into the performance of an agreement, yet the lack of effort is not independently verifiable, this lack of effort constitutes aa. breach of contractual obligations b. denial of good guarantee c. loss of reputation d. moral hazard Question 124 out of 4 pointsGovernance mechanisms are designeda. to increase contracting costs b. to resolve post-contractual opportunism c. to enhance the flexibility of restrictive covenants d. to replace insurance e. none of the above Question 134 out of 4 pointsWhich of the following is not among the functions of contract?a. to provide incentives for efficient relianceb. to reduce transaction costsc. to discourage the development of asymmetric informationd. to provide risk allocation mechanismsQuestion 144 out of 4 pointsWhen retail bicycle dealers advertise and perform warranty repairs but do not deliver the personal selling message that Schwinn has designed as part of the marketing plan but cannot observe at less than prohibitive cost, the manufacturer has encountered a problem of ____.a. reliance relationshipsb. uncertaintyc. moral hazardd. creative ingenuitye. insurance relianceQuestion 154 out of 4 pointsWhen borrowers who do not intend to repay are able to hide their bad credit histories, a lender's well-intentioned borrowers shoulda. complain to regulatory authorities b. withdraw their loan applications c. offer more collateral in exchange for lower interest charges d. divulge still more information on their loan applications e. hope for a pooling equilibriumQuestion 164 out of 4 pointsThe ____ is equal to the some of the squares of the market shares of all the firms in an industry.a. market concentration ratio b. Herfindahl-Hirschman index c. correlation coefficient d. standard deviation of concentration e. none of the aboveQuestion 174 out of 4 pointsThe antitrust laws regulate all of the following business decisions except ____.a. collusion b. mergers c. monopolistic practices d. price discrimination e. wage levelsQuestion 184 out of 4 pointsThe lower the barriers to entry and exit, the more nearly a market structure fits the ____ market model.a. monopolistic competition b. perfectly contestable c. oligopoly d. monopoly e. none of the aboveQuestion 194 out of 4 pointsThe sentiment for increased deregulation in the late 1970's and early 1980's has been felt most significantly in the price regulation ofa. coal b. grain c. transportation d. automobiles e. electric power generationQuestion 204 out of 4 points____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant.a. Pecuniary benefits and costs b. Externalities c. Intangibles d. Monopoly costs and benefits e. none of the aboveQuestion 214 out of 4 pointsIf the acceptance of Project A makes it impossible to accept Project B, these projects are:a. contingent projects b. complementary projects c. mutually inclusive projects d. mutually exclusive projects e. none of the aboveQuestion 224 out of 4 pointsThe social rate of discount is best approximated by:a. the cost of government borrowingb. the opportunity cost of resources taken from the private sectorc. 3 percentd. 30 percente. none of the aboveQuestion 234 out of 4 pointsWhich of the following items is (are) not considered as part of the net investment calculation?a. the first year's net cash flowb. increase in net working capitalc. salvage of an old piece of equipment that is being replacedd. installation and shipping chargesQuestion 244 out of 4 pointsAll of the following except ____ are shortcomings of cost-benefit analysis.a. difficulty in measuring third-party costsb. difficulty in measuring third-party benefitsc. failure to consider the time value of benefits and costsd. difficulty of accounting for program interactionse. a and bQuestion 254 out of 4 pointsIn cost-effectiveness analysis, constant cost studies:a. are rarely usedb. attempt to specify the output which may be achieved from a number of alternative programs, assuming all are funded at the same levelc. are useless because they fail to adequately evaluate program benefitsd. try to find the least expensive way of achieving a certain objectivee. none of the above