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Exam Managerial Economics 2017-18 Marks: 10 Time: 15 Minutes

This document contains a 10 question quiz on managerial economics concepts. The questions cover topics like price discrimination types, Nash equilibriums in game theory scenarios, and dominant strategies. The solutions key indicates the correct answer for each multiple choice question is: a, a, d, c, d, d, e, b, d, c.

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40 views

Exam Managerial Economics 2017-18 Marks: 10 Time: 15 Minutes

This document contains a 10 question quiz on managerial economics concepts. The questions cover topics like price discrimination types, Nash equilibriums in game theory scenarios, and dominant strategies. The solutions key indicates the correct answer for each multiple choice question is: a, a, d, c, d, d, e, b, d, c.

Uploaded by

Bhakta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Exam Managerial Economics 2017-18 Quiz 3

Marks: 10 Time: 15 minutes

1. A tennis-pro charges $15 per hour for tennis lessons for children and $30 per hour for tennis lessons for
adults. The tennis-pro is practicing
a. Third-degree price discrimination.
b. Fourth-degree price discrimination.
c. Second-degree price discrimination.
d. First-degree price discrimination.

2. Which of the following is NOT a condition for third degree price discrimination?
a. Economies of scale
b. Different own price elasticities of demand
c. Market power
d. Separate markets

3. Second-degree price discrimination is the practice of charging


a. the reservation price to each customer.
b. each customer the maximum price that he or she is willing to pay.
c. different groups of customers different prices for the same products.
d. different prices for different quantity blocks of the same good or service.

4. Consider the following payoff matrix for a game in which two firms attempt to collude:

Firm B
Firm B cuts
colludes
Firm A cuts 6,6 24,8
Firm A
8,24 12,12
colludes

Here, the possible options are to retain the collusive price (collude) or to lower the price in attempt to increase
the firm's market share (cut). The payoffs are stated in terms of millions of dollars of profits earned per year.
What is the Nash equilibrium for this game?
a. Both firms collude.
b. There are no Nash equilibria in this game.
c. There are two Nash equilibria: A cuts and B colludes, and A colludes and B cuts.
d. Both firms cut prices.

5.
1
What is the equilibrium of the above game?
a. A, X
b. B, X
c. A, Y
d. B, Y

6.

How many equilibria does the above game have?


a. 9
b. 3
c. 1
d. 0

Scenario 1:

7. Which of the following is true about the game in Scenario 1?


a. ABC's dominant strategy is not offer a rebate.
b. XYZ's dominant strategy is not offer a rebate.
c. XYZ's dominant strategy is to offer a rebate.
d. ABC's dominant strategy is to offer a rebate.
e. Both ABC and XYZ have offer a rebate as a dominant strategy.

8.

2
What is the equilibrium of the above game?
a. {Buy, Accommodate}
b. {Buy, Fight}
c. {Not Buy, Accommodate}
d. {Not Buy, Fight}

9. Which of the following can be thought of as a barrier to entry?


a. scale economies
b. strategic actions by incumbent firms
c. patents
d. all of the above

10. Your economics professor has decided that your class will not be graded on a curve but on an absolute scale.
Therefore, it is possible for every student in the class to get an "A." Your grade will not depend in any way
on your classmates' performance. Based on this information, you decide that you should study economics
three hours each day, regardless of what your classmates do. In the language of game theory, your decision
to study three hours each day is a:
a. simple strategy.
b. Prisoner's dilemma.
c. dominant strategy.
d. cooperative strategy.

Solutions:
1. a
2. a
3. d
4. c
5. d
6. d
7. e
8. b
9. d
10. c

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