sq_12 - Sample Quiz #12 Ec 201 Michigan State University...

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Sample Quiz #12 Ec 201 Spring, 2009 Michigan State University L. Martin 1. The model in which consumers do not know quality while producers do know quality is called the a. principal-agent model; b. reputation model; c. trigger strategy model; d. prisoner’s dilemma model; e. lemons model.* 2. According to the reputation model, price a. equals the minimum of the long run average cost; b. equals average cost, but not at the minimum; c. exceeds average cost because customers reward firms for their history of high quality service; d. is less than average cost because customers do not believe the firms promise to deliver high quality service; e. exceeds average cost and customers promise to return with future business if the firm gives high quality service.* 3. A firm hires a consultant to evaluate its marketing strategy. a. the firm is the principal and the consultant is the agent;* b. the consultant is the agent and the firm is the principal; c. both the consultant and the firm are principals; d. both the consultant and the firm are agents; e. none of the above. 4.
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sq_12 - Sample Quiz #12 Ec 201 Michigan State University...

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