ch 3-6

D. All the above

​ A parking lot in a busy downtown district is experimenting with its pricing strategy to figure out where it should price its spaces. Which of the following strategies should it implement? A. Increase parking rates if the lot fills up much earlier than 9 am B. Decrease parking rates if the lot doesn't fill up much after 9 am C. If the lot fills up right around 9 am the price is right D. All the above

D. Both B&C

​ Expected values are A. Values that you expect from an individual B. Mean values C. Weighted average outcomes D. Both B&C

A. Revenue increases by 8%

​ If the quantity sold of two-liter Coke bottles increases by 10% when price falls by 2%, what is the total change in revenue? A. Revenue increases by 8% B. Revenue falls by 8% C. Revenues increases by 12% D. Revenue falls by 12%

B. The highest willingness to pay among the losers

​ In oral auctions, the price that the winner pays depends on A. The winners willingness to pay B. The highest willingness to pay among the losers C. The lowest willingness to pay among the losers D. None of the above

B. Soft drinks sales

​ You want to run a difference-in-difference experiment with a price increase for the bacon cheeseburger item on your menu. If you are worried about "leakage" with your control group, a good comparison menu item would be A. The bacon-lettuce-and tomato sandwich B. Soft drinks sales C. The bacon burger without cheese D. The regular cheeseburger

D. None of the above

A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value. The shoe manufacturer believes that the advertisement will make A. The demand for its product less elastic B. His customers less price sensitive C. Him able to raise prices D. None of the above

B. is where bidders submit increasing bids until all but one remains

An oral auction A. Is also called a Vickrey auction B. is where bidders submit increasing bids until all but one remains C. is where the highest bidder wins and pays the amount of the next highest bid D. All of the above

A. $100

Anna's Antiques expects to get three bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. If three bidders show up at the auction and all of them are high-value bidders, what would the winning bid be? A. $100 B. $70 C. Just above $100 D. Just above $70

B. -0.40

As the price of dvds increases from $3 to $5, the quantity demanded falls from 220,000 to 180,000. The price elasticity of demand for dvds is: A. -2.50 B. -0.40 C. -3.00 D. -0.33

D. $40

At a fair carnival roulette wheel, a player can either win $10, $30, or $80. If the player were to be made indifferent between playing the game or not, how much should the owner charge him? A. $50 B. $80 C. $30 D. $40

D. All the above

By focusing the customers on the price of a product, you A. Increase your chances of engaging in a price war with your competitors B. Make the customers more price sensitive to the product C. Make the demand for the product more elastic D. All the above

A. More elastic

By focusing the customers on the price of a product, you make the demand for the product​ A. More elastic B. Less elastic C. Perfectly inelastic D. None of the above

C. The product is low quality

Given that you observe nothing but the low price of the product, you are more likely to infer that A. The product is high quality B. The product is the highest quality possible C. The product is low quality D. None of the above

A. increase the prices of the product

If advertising makes demand of a product less elastic, it makes sense for a firm to​ A. increase the prices of the product B. Leave the price unchanged C. decrease the price of the product D. none of the above

B. Just over $7

If the bidders at an oral auction have true values of $8, $7, $6, and $5, the item will sell for A. just under $7 B. Just over $7 C. $8 D. $7

A. Decrease

If the price elasticity of demand is -0.8 and the firm decreases price, revenue will A. Decrease B. become zero, they would lose all their customers C. Increase D. Stay constant

D. All of the above

In a common-value auction A. No. bidder knows what the exact value of the item being auctioned B. each bidder has only an estimate of the value of the item C. The value is the same for each bidder D. All of the above

B. The larger the responsiveness of quantity to changes in prices

In general, the larger the price elasticity: A. The larger the responsiveness of price to change in quantity B. The larger the responsiveness of quantity to changes in prices C. The smaller the responsiveness of price to changes in quantity D. The smaller the responsiveness of quantity to changes in price

C. 1.29

Jim saw a decrease in the quantity demanded for his firm's product from 8000 to 6000 units a week when he raised the price of the product from $200 to $250. What is Jim's own price elasticity of demand? A. 0.25 B. 1 C. 1.29 D. 0.78

D. Type 11 error

The VP in charge of product launches hypothesizes that a particular product would be profitable, then launching an unprofitable product is a A. Type IV error B. Type 111 C. Type 1 error D. Type 11 error

A. Bid exactly your value

The optimal strategy in a Vickery auction is to A. Bid exactly your value B. Bid above your value since you would be paying thee second highest price C. Bid aggressively D. Bid below your value

C. 2

The quantity demanded of good X falls by 20% and, in response, your income goes down by 10% and, the income elasticity of demand would be: A. 5 B. 4 C. 2 D. 20

C. $18

Three possibilities have probabilities 0.4, 0.4 and 0.2 and values $10, $20, and $30 respectively. The expected value is: A. $17 B. $16 C. $18 D. $15

A. Reveal all of the relevant information about the value of the object

To attract more bidders, and more aggressive bidders, to your common-value auction​ A. Reveal all of the relevant information about the value of the object B. Do not allow potential bidders to examine the object too closely C. Do not hold oral auctions D. Don't allow bidders to know how others are bidding

D. All of the above

You are considering buying a store. In order to better access your return on the investment, you must ask the storeowner for the figures on days when A. Sales are high, costs are low B. Sales are low, costs are high C. Both sales and costs are high D. All of the above

C. A firm should increase quantity as long as price is greater than marginal cost

​Which of the following statements is true A. A firm should increase quantity as long as marginal cost is greater than price B. A firm should increase quantity as long as price is higher than average cost, regardless of the marginal cost C. A firm should increase quantity as long as price is greater than marginal cost D. A firm should increase quantity as long as average cost is greater than price