ARE 100B - Midterm 2 Key, version A

ARE 100B - Midterm 2 Key, version A - ARE lOOb M. Whitney...

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ARE lOOb M. Whitney Spring 2009 YOURNAME: ____________________________________ _ SECOND MIDTERM This exam has two sections. Section A consists of 10 multiple-choice questions, each worth 10 points .. Total possible points in Section A = 100. Section B consists of 5 problems each worth 30 points. Partial credit is given for correct approach even if final answer is incorrect, so show your work! Total possible points in Section B = 150. Total points in this exam: 250
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SECTION A Multiple choice--I 0 points each I. Suppose two fIrms, A and B, have formed a cartel. Their cost functions are: Tea = 10 qa + .1 qa"2 TCb = 14 qb + .05 qb"2 If you observe that fInn A is producing 50 units, what else do you expect is true? a. Price is $20. b. Finn A's ATC is $20. @Finn B's ATC is $17. d. All of the above. e. None 2. Implicit cooperation among firms is a characteristic of which model below? a monopolistic competition ® dominant finn with a competitive fringe c. ex ante competition/ex post monopoly d. all e. none 3. In which type of auction below would the practice of "sniping" be effective in helping the seller achieve a better price? a. English! American auction b. Dutch auction c. Sealed-bid auction d. On-line auction (§) None Questions 4 and 5 refer to the payoff matrix below: Player 2 Player 1 (8, 10) (4,3) (9, I) (3,2) (-4,6) (6, 7) (7, -5) (8,6) (5,3) 4. Which, if any, player has a dominant strategy in this game? a Player 1 b. Player2 c. Both players @ Neither player 5. How many Nash equilibria in pure strategies exist in this matrix? a None b.One @Two d. Three
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6. What is the difference between market price under (i) Bertrand oligopoly, and (ii) perfect competition? Assume all firms produce homogeneous (not differentiated) goods.
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This note was uploaded on 11/19/2009 for the course ARE ARE100B taught by Professor Chenguang during the Spring '09 term at UC Davis.

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ARE 100B - Midterm 2 Key, version A - ARE lOOb M. Whitney...

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