Larry's Lizards and Ronaldo's Reptiles are competing pet store franchises. Both are considering opening a store in the small town of Turtleville. If Ronaldo's opens a profitable store in Turtleville and Larry's management determines that
it is not profitable to also open a store, then:
A. this is a simultaneous game.
B. a Nash equilibrium is not possible in this game.
C. Ronaldo's had a first-mover advantage in this game.
D. this is a zero-sum game.
Answer: C
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In the U.S., the ________ and the ________ prohibit firms from explicitly agreeing to take actions that reduce competition
A) Department of Justice Act; Federal Trade Commission Act B) Sherman Antitrust Act; Federal Trade Commission Act C) Per Se Act; Sherman Antitrust Act D) Pareto Act; Anti-Cartel Act
All else equal, anything that increases the transportation costs ________ the number of consumers shopping at ________.
A) increases; larger, less expensive stores B) increases; local, more expensive stores C) does not change; local, more expensive stores D) does not change; larger, less expensive stores
Appendix: A Dutch auction implies all of the following except
a. more than one unit sale available b. higher prices later in the auction c. identical expected seller revenue for common value items d. greater expected seller revenue in estate sales with risk-averse bidders
An employer-employee relationship is
a. a nonmarket relation b. a principal-agent relation c. a comparable worth relation d. a substitution relation e. a winner's curse