final-s04 - Department of Economics University of...

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Department of Economics Spring 2004 University of California Prof. Woroch Economics 121: FINAL EXAM GENERAL INSTRUCTIONS : Print your name on the front of each blue book that you use. Please write clearly. The exam has three parts with some choice. All together there are 150 points. Point assignments are given in the instructions for each part. I. TRUE or FALSE or UNCERTAIN and EXPLAIN : Choose 7 of the following 10 statements, decide whether each is true or false or uncertain, and then explain the reasoning behind your answer. Be sure to state any additional assumptions you need to arrive at your conclusion. Each is worth 6 points for a total of 42 for this part. 1. The Lerner Index increases as the number of symmetric Cournot oligopolists increases. 2. The presence of strong scope economies in two stages of production is a pro-competitive reason for vertical integration. 3. All else equal, it should be more difficult to enter the cellular telephone service industry when consumers are allowed to keep their phone numbers when they switched carriers compared to when they must change numbers. 4. A producer might rationally refuse to become a member of a cartel even if the cartel successfully deters “chiseling.” 5. The “merger paradox” may not occur when the products of merging and non-merging firms are differentiated. 6. In the “chain store paradox,” potential entrants in the separate markets choose not to enter because the chain store threat in one market makes its threat credible in other markets. 7. Because of the cost characteristics of information goods such as computer software, the Areeda-Turner test will almost never indicate predation. 8.
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final-s04 - Department of Economics University of...

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