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ECO550 Final Part 1 & 2 Latest 2017 (Perfect Answer)
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PART 1

Question 1

0 out of 4 points

Evidence from empirical studies of long-run cost-output relationships lends support to the:

a. existence of a non-linear cubic total cost function
b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm
c. hypothesis that total costs increase quadratically over the ranges of output examined
d. hypothesis that total costs increase linearly over some considerable range of output examined
e. none of the above

Question 2

0 out of 4 points

The short-run cost function is:

a. where all inputs to the production process are variable
b. relevant to decisions in which one or more inputs to the production process are fixed
c. not relevant to optimal pricing and production output decisions
d. crucial in making optimal investment decisions in new production facilities
e. none of the above

Question 3

0 out of 4 points

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

Question 4

4 out of 4 points

A ____ total cost function implies that marginal costs ____ as output is increased.

a. linear; increase linearly
b. quadratic; increase linearly
c. cubic; increase linearly
d. a and b
e. none of the above

Question 5

4 out of 4 points

Break-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 d

Question 6

4 out of 4 points

In 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 ratio
b. contribution margin per unit
c. selling price per unit
d. standard deviation of unit sales
e. none of the above

Question 7

4 out of 4 points

The 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 run

Question 8

4 out of 4 points

Experience goods are products or services

a. that the customer already knows

b. whose performance is highly unusual

c. whose quality is undetectable when purchased

d. not likely to cause repeat purchases

e. all of the above

Question 9

4 out of 4 points

Uncertainty includes all of the following except ____.

a. unknown effects of deliberate actions

b. incomplete information as to the type of competitor

c. random disturbances

d. unverifiable claims

e. accidents due to weather hazards

Question 10

4 out of 4 points

Under asymmetric information,

a. you never get what you pay for

b. you sometimes get cheated

c. you always get cheated

d. at best you get what you pay for

e. sellers make profits in excess of competitive returns

Question 11

4 out of 4 points

A "search good" is:

a. One that depends on how the product behaves over time

b. A product whose quality is only found out over time by finding how durable it is

c. Like a peach that can be examined for flaws

d. Like a used car, since it is easy to determine its inherent quality

e. None of the above

Question 12

4 out of 4 points

If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.

a. more; decrease; down

b. more; decrease; up

c. more; increase; down

d. more; increase; up

e. none of the above

Question 13

4 out of 4 points

The 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 Leverage

b. A Lemon's Market

c. Redeployment Assets

d. Cyclical Competition

e. The Unemployment Rate

Question 14

4 out of 4 points

The 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 above

Question 15

4 out of 4 points

Declining cost industries

a. 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 curve

Question 16

4 out of 4 points

In 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 monopoly

e. all of the above

Question 17

4 out of 4 points

The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:

a. inverted block pricing

b. second-degree price discrimination

c. peak-load pricing

d. first-degree price discrimination

e. none of the above

Question 18

4 out of 4 points

In 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, lower

e. inelastic, higher

Question 19

4 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 pricing

b. Inverted block pricing

c. Block pricing

d. First degree price discrimination

e. None of the above

Question 20

4 out of 4 points

“Conscious parallelism of action” among oligopolistic firms is an example of ____.

a. intense rivalry

b. a formal collusive agreement

c. informal, or tacit, cooperation

d. a cartel

e. none of the above

Question 21

4 out of 4 points

Barometric price leadership exists when

a. 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 colluding

Question 22

4 out of 4 points

If 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 cost

b. average profit

c. marginal profit

d. marginal cost

e. marginal revenue

Question 23

4 out of 4 points

A(n) ____ is characterized by a relatively small number of firms producing a product.

a. monopoly

b. syndicate

c. cooperative

d. oligopoly

e. none of the above

Question 24

4 out of 4 points

In 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 industry

e. all of the other firms raise their prices.

Question 25

4 out of 4 points

In 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. price

b. output

c. marketing strategy

d. inventory

e. none of the above

 

Part 2

Question 1

4 out of 4 points

Consider 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 2

4 out of 4 points

Cooperation in repeated prisoner's dilemma situations seems to be enhanced by all of the following except

a. limited punishment schemes

b. clarity of conditional rewards

c. grim trigger strategy

d. provocability-- i.e ., credible threats of punishment

e. tit for tat strategy

Question 3

4 out of 4 points

Credibility in threats and commitments in sequential games is based on

a. randomizing one's actions so they are unpredictable

b. explicit communications with competitors

c. effective scenario planning

d. analyzing best reply responses

e. none of the above

Question 4

4 out of 4 points

When 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 5

4 out of 4 points

Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except when

a. the promisor is better off fulfilling than ignoring his promise

b. neither party has a prior dominant strategy

c. the hostage can be revoked for just causes

d. the hostage is more valuable than any given exchange

e. the hostage is difficult to replace

Question 6

4 out of 4 points

Which of the following pricing policies best identifies when a product should be expanded, maintained, or discontinued?

a. full-cost pricing policy

b. target-pricing policy

c. marginal-pricing policy

d. market-share pricing policy

e. markup pricing policy

Question 7

4 out of 4 points

Third-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 8

4 out of 4 points

Firms that have a cover charge for their customers and charge for each item they purchase as well are exhibiting

a. universal access price discrimination

b. declining block price discrimination.

c. mixed bundling price discrimination.

d. two-part price discrimination.

e. uniform pricing 

Question 9

4 out of 4 points

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

Question 10

4 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 above

Question 11

4 out of 4 points

When 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 a

a. breach of contractual obligations

b. denial of good guarantee

c. loss of reputation

d. moral hazard 

Question 12

4 out of 4 points

Governance mechanisms are designed

a. 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 13

4 out of 4 points

Which of the following is not among the functions of contract?

a. to provide incentives for efficient reliance

b. to reduce transaction costs

c. to discourage the development of asymmetric information

d. to provide risk allocation mechanisms

Question 14

4 out of 4 points

When 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 relationships

b. uncertainty

c. moral hazard

d. creative ingenuity

e. insurance reliance

Question 15

4 out of 4 points

When borrowers who do not intend to repay are able to hide their bad credit histories, a lender's well-intentioned borrowers should

a. 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 equilibrium

Question 16

4 out of 4 points

The ____ 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 above

Question 17

4 out of 4 points

The antitrust laws regulate all of the following business decisions except ____.

a. collusion

b. mergers

c. monopolistic practices

d. price discrimination

e. wage levels

Question 18

4 out of 4 points

The 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 above

Question 19

4 out of 4 points

The sentiment for increased deregulation in the late 1970's and early 1980's has been felt most significantly in the price regulation of

a. coal

b. grain

c. transportation

d. automobiles

e. electric power generation

Question 20

4 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 above

Question 21

4 out of 4 points

If 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 above

Question 22

4 out of 4 points

The social rate of discount is best approximated by:

a. the cost of government borrowing

b. the opportunity cost of resources taken from the private sector

c. 3 percent

d. 30 percent

e. none of the above

Question 23

4 out of 4 points

Which of the following items is (are) not considered as part of the net investment calculation?

a. the first year's net cash flow

b. increase in net working capital

c. salvage of an old piece of equipment that is being replaced

d. installation and shipping charges

Question 24

4 out of 4 points

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

Question 25

4 out of 4 points

In cost-effectiveness analysis, constant cost studies:

a. are rarely used

b. attempt to specify the output which may be achieved from a number of alternative programs, assuming all are funded at the same level

c. are useless because they fail to adequately evaluate program benefits

d. try to find the least expensive way of achieving a certain objective

e. none of the above

 

Available solutions
  • ECO550 Final Part 1 & 2 Latest 2017 (Perfect Answer)
    $36.00

    PART 1 Question 1 0 out of 4 points Evidence from empirical studies of long-run cost-output relationships lends support to the: a. existence of a non-linear cubic total cost function b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm c. hypothesis that total costs increase quadratically over the ranges of output examined d. hypothesis that total costs increase linearly over some considerable range of output examined e. none of the above Question 2 0 out of 4 points The short-run cost function is: a. where all inputs to the production process are variable b. relevant to decisions in which one or more inputs to the production process are fixed c. not relevant to optimal pricing and production output decisions d. crucial i

    Submitted on: 21 Sep, 2017 04:53:43 This tutorial has not been purchased yet .