The following are all least squares assumptions with the exception of:
A) The conditional distribution of ui given Xi has a mean of zero.
B) The explanatory variable in regression model is normally distributed.
C) (Xi, Yi), i = 1,..., n are independently and identically distributed.
D) Large outliers are unlikely.
Ans: B) The explanatory variable in regression model is normally distributed.
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Which of the following is not cited as a reason for a firm to pursue a group pricing strategy?
A) To minimize its total costs of production. B) To increase its total profit. C) To attract and lock in additional customers. D) To create network externalities.
If Best Paints and Paint with Us are competing in a duopoly and it is always best for Best Paints to charge a price of $20 per gallon of paint regardless of the price Paint with Us charges, then charging $20 is ________ for Best Paints.
A) a dominant, but not pure strategy B) a dominant and pure strategy C) a pure, but not dominant strategy D) neither a dominant nor pure strategy
An "optimally imperfect" decision is one that
a. is vaguely right instead of precisely wrong. b. recognizes that the decision could always be better if given more time. c. recognizes that the cost of additional information probably exceeds the potential gain from making a better decision. d. recognizes that any decision is imperfect because humans have limited intellectual capacities.
The payoff to an oligopolist's price cut depends on how its rivals respond.
Answer the following statement true (T) or false (F)