Spring 2009 - Exam II - BLUE

Spring 2009 - Exam II - BLUE - Consider the following...

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Consider the following simultaneous move game: Player 2 Strategy Up Down Player 1 Up (200, 225) (400, 100) Down (150, 75) (300, 200) 1. If both players play a secure strategy, Player 1’s payoff will be: a) 150 b) 200 c) 300 d) 400 2. Which of the joint strategies [(Player 1’s move; Player 2’s move)] below is a Nash equilibrium? a) (Up; Up) b) (Up; Down) c) (Down; Up) d) (Down; Down) e) None of the above. 3. We would expect Player 1 to be willing to pay up to ______ dollars for the right to make the first move, assuming Player 2 would observe this move before she makes her move. a) 0 b) 50 c) 100 d) 150 e) 200 4. Player 2 would be willing to pay up to _______ dollars to prevent Player 1 from making the first move. a) 0 b) 25 c) 50 d) 75 e) 100 5. Two banks in a market with current shares of total market sales of 10 and 12 percent announce plans to merge. Such a merger will cause the HHI index to increase by ______ points. a) 180 b) 200 c) 220 d) 240 e) There is insufficient information here to calculate the change in the HHI. 6. Demand for the consulting services of Allied Tech Services is shown here. Allied has constant marginal costs of production equal to 6 and Total Fixed Costs equal to 400. If Allied is a profit maximizing firm it will earn profits equal to a) – 20 d) 90 b) 0 e) None of the above. c) 40 1 Price Q 200 150 100 50 5 10 15 20 D
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7. The long run supply curve for a firm in an industry characterized by perfect competition is: a) the marginal cost curve above minimum average total cost. b) the marginal cost curve above minimum average variable cost. c) the marginal cost curve. d) None of the above. 8. The short run supply curve for a firm in an industry characterized by monopolistic competition is: a) the marginal cost curve above minimum average total cost. b) the marginal cost curve above minimum average variable cost.
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This note was uploaded on 05/18/2010 for the course ECON 415 taught by Professor Holland during the Spring '09 term at Purdue.

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Spring 2009 - Exam II - BLUE - Consider the following...

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