Economy Exam Questions Essay

1. The Prisoners Dilemma involves two spies who atomic number 18 held in separate soundproof rooms. But even if the two spies could communicate, what makes it difficult for them to secure the cooperative solution (both non confessing)?2. A key to analyzing subgame perfect counterbalance dodge in sequential games is3. In making promises that are non guaranteed by third parties and in imposing penalties that are not oblige by third parties, all of the future(a) are credibility-enhancing mechanisms except4. The commencement point of many methods for predicting equilibrium strategy in sequential games is5. presumable promises and hostage mechanisms can support a continuous stream of cooperative exchanges except when6. Firms that have a cover charge for their customers and charge for apiece item they purchase as well are exhibiting7. Third-degree set diversity exists whenever8. To maximize profits, a monopolist that engages in terms discrimination essential(prenominal) allo cate output in such a way as to make identical the ____ in all markets.9. Vacation tours to Europe constantly package visits to disparate regions cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when10. ____ is a new-sprung(prenominal) product pricing strategy which results in a high initial product price. This price is decrease over time as demand at the higher price is satisfied11. Contracts are distinguished from tactical alliances by which of the following characteristics12. When someone contracts to do a task but fails to put full essay into the performance of an agreement, yet the neglect of effort is not independently verifiable, this lack of effort constitutes a13. When borrowers who do not intend to repay are able to hide their bad credit histories, a lenders well-intentioned borrowers should14. To accomplish its purpose a analog profit-sharing contract must15. When retail bicycle dealers advertise and per form warranty repairs but do not deliver the personal selling message that Schwinn has designed as part of the marketing plan but cannot observe at slight than prohibitive price, the manufacturer has encountered a problem of ____.16. The lower the barriers to entry and exit, the much nearly a market structure fits the ____ market model.17. ____ yields the same results as the theory of perfect competition, but requires substantially fewer assumptions than the perfectly competitory model18. ____ occurs whenever a third party receives or bears costs arising from an scotch transaction in which the individual (or group) is not a direct participant.19. The fair laws regulate all of the following business decisions except ____.20. The sentiment for increase deregulation in the late 1970s and early1980s has been snarl most significantly in the price regulation of21. The ____ depicts the risk-return relationship in the market for all securities22. If the stimulateance of Project A ma kes it impossible to accept Project B, these projects are23. Capital expenditures24. The decision by the Municipal conveyance Authority to either refurbish existing buses, buy new heavy(p) buses, or to supplement the existing fleet with mini-buses is an example of25. Which of the following items is (are) not considered as part of the net investment calculation?1. In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as2. Evidence from empirical studies of long-run cost-output relationships lends support to the3. Theoretically, in a long-run cost swear out4. In a film of banking by addition size over time, we can find which asset sizes are tending to become more(prenominal) prominent. The size that is becoming more predominant is presumed to be least cost. This is called5. A ____ total cost function implies that bare(a) costs ____ as output is increased.6. In the linear breakeven model, the breakeven sales book ( in dollars) can be make by multiplying the breakeven sales volume (in units) by7. Long distance telephone service has become a competitive market. The average cost per call is $0.05 a minute, and its declining. The belike reason for the declining price for long distance service is8. All of the following are mechanisms which reduce the adverse selection problem except ____.9. In the long-run, firms in a monopolistically competitive industry will10. An experience sizable is one that11. The price for used cars is well below the price of new cars of the same general quality. This is an example of12. In the short-run for a rigorously competitive market, a manufacturer will stop production when13. friendship goods are products or services14. Declining cost industries15. 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 16. When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation.17. Regulatory agencies engage in all of the following activities except _______.18. ____ as practiced by familiar utilities is designed to encourage greater usage and therefore spread the ameliorate costs of the utilitys plant over a bigger number of units of output.19. The practice by telephone companies of charging lower long-distance rate at night than during the day is an example of20. Some industries that have slopped prices. In those industries, we tend to21. The existence of a kinked demand curve to a lower place oligopoly conditions may result in22. Barometric price leadership exists when23. A cartel is a situation where firms in the industry24. Even apotheosis cartels tend to be unstable because25. Some market conditions make cartels to a greater extent likely to succeed in tacit consent. Which of the following will make collusi on more successful?