{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Practice Final 3 (with answers)

Practice Final 3 (with answers) - University of Michigan...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
University of Michigan School of Business Administration Practice Final Exam 4 WITH ANSWERS Instructions: 1) You will have two hours to complete the exam. Check to make sure you have all of the pages. In the multiple choice section, there are 9 multiple choice problems and an additional three short answer related to the last multiple choice problem. In the short answer section, there are 4 problems. 2) When you have finished your exam a) Read and sign the Honor Policy below, and b) sign the sheet in the front of the room as you turn in your exam. 1) For the multiple choice section, fill in the correct answer on the form provided. 2) For the short answer section: a) Do not ramble on; but DO SHOW HOW YOU ARRIVED AT YOUR ANSWER where asked to. Even if your answer is correct, if you are asked to show your work and do not, you may receive no credit b) Do whatever work you want on scratch paper or on the back of pages, but give the complete and concise answer including the process of getting to that answer in the space provided below the question. c) If you do not know the first part to a question, do not skip the next parts -- even though your subsequent answers might be wrong, you will receive credit if they are correct given the answer you had in the first section. d) Any work that you want graded must be included in the stapled sheets of this test – DO NOT INCLUDE LOOSE SCRATCHPAPER AS PART OF YOUR ANSWER.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Multiple Choice – Choose the BEST answer in each case (5 points each) 1. Middlebury, Vermont has only one video store. The incumbent video store has warned potential competitors that if the potential competitors establish a store in Middlebury that the incumbent will start a price war by charging a very low price. The potential entrant has determined the associated profits of this game and they are as follows: Potential Entrant Enter Stay Out Incumbent Low Price 10, -5 20, 0 High Price 40, 20 200, 0 Based on this information, which of the following is true? a. If the incumbent threatens a price war, the potential entrant would view that as credible. b. The potential entrant has a dominant strategy to enter. c. There are no Nash equilibria d. All of the above e. None of the above. (Questions 2-3) A constant-cost , perfectly competitive industry is initially in long-run equilibrium. Suddenly, demand unexpectedly decreases.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 9

Practice Final 3 (with answers) - University of Michigan...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online