Question

1) When a utility charges homeowners less on a per-unit basis than corporate users it is practicing:

a) first-degree price discrimination

b) second-degree price discrimination

c) third-degree price discrimination

d) markup pricing

e) tying

2) when an electrical utility charges higher prices during the day than at night it is practicing:

a) peak-load pricing

b) first-degree price discrimination

c) second-degree price discrimination

d) third-degree price discrimination

e) fourth-degree price discrimination

3) Gliberace's Fashion Accessories of Las Vegas produces gemstone-encrusted formal wear for sale in Los Angeles and San Francisco subject to total cost TC = 100 + 5(Q_LA + Q_SF). Demand for Gliberace's stones in the two cities is given by Q_LA = 70 - 2P_LA and Q_SF = 55 - P_SF. If Gliberace price discriminates between the two cities, how many stones will it sell in L?

a) 30

b) 36

c) 38

d) 43

e) 48

4) Game theory is useful for understanding oligopoly behavior because:

a) there are so many firms in an oligopoly that all are price takers

b) firms must differentiate their products if they are to remain in business

c) firms recognize that because there are only a few firms mutual interdependence is important

d) without it firms would not be able to maintain cartel agreements

e) it allows firms to develop greater monopoly power

5) A feasible strategy set is:

a) all actions with a nonzero probability of occurring

b) only actions that have a 50 percent or greater probability of occurring

c) actions that result in positive profits for the firm

d) actions hat a decision-maker is willing to take

e) the outcome that the decision-maker chooses

6) In a two-player game in which each player has four options how many outcomes can there be:

a) 1

b) 4

c) 8

d) 16

e) 64