Mock Final Exam answers

The marginal cost of the producer is constantly

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Unformatted text preview: y guide price $40 e. Standalone pricing strategy at textbook price $30 and study guide price $40 13. Pricing: Andrew wishes to implement price discrimination strategy for his cat business. Which of the following will not hinder the success of his strategy? a. Buyers selling cats on eBay. b. Annie just opened another cat shop across the street. c. Consumers are shifting from buying cats to buying foxes. d. Andrew is unsure what kind of customers he has. e. None of the above 14. Monopolistic Competition: For the purpose of this question, Andrew's cat business now operates in a monopolistically competitive market. The demand and cost are still the same as in question 9, given by Q=10-P/3 and C=50+5Q+Q2, respectively. If his production and price levels are constant, his revenue in the long run is... a. $0.00 b. $20,625.00 c. $46,875.00 d. $64,453.13 e. $75,000.00 15. Game Theory: The following table represents all the possible outcomes in an duopoly: Samsung Apple Sue Don't sue Sue -30, -30 70, 20 Don't sue 20, 70 40, 40 Which statement is corret? a. The maximin strategy will yield the same outcome as in an infinitely repeated game. b. If the game is played 20 times, both firms will never sue. c. No firm has incentive to sue each other in the case of a sequential game. d. Both A and C e. None of the above 16. Uncertainty: Bob is a risk lover. What could his utility function look like? a. U=3W+9 b. U=5W0.9 c. U=W/0.4 d. U=W2-0.24 e. U=0.5W0.3 17. Behavioral Economics: Fred is looking for a job. The first job offers him a base pay of $5000, with 30% of chance of getting a $5000 bonus that is randomly distributed. The second job offers him $10000 base pay, but his pay has a 70% chance to be cut in half. Assuming Fred behaves like an average person who has never paid attention in econ classes, which one would he choose? a. First job b. Second job c. He would be indifferent. d. We need to know his attitude towards risks in order to answer this question. e. None of the above 18. Asymmetric Information: UBC bookstore sells a set quantity of used textbooks, som...
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