Consider a market for product X where 75 percent of the stores charge $500 and 25 percent charge $450. Compute the expected benefit from an additional search when the first search results in a price of $500.
A. $12.50
B. $50
C. $37.50
D. $500
Answer: A
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If smartwatches are considered substitutes for smartphones, then the decline in the price of smartwatches would, all else equal
A) increase the demand for smartphones. B) decrease the quantity of smartphones demanded. C) decrease the demand for smartphones. D) increase the quantity of smartphones demanded.
The production period in which at least one input is fixed in quantity is the
A) production run. B) long run. C) short run. D) planning horizon.
Which of the following will increase (V0), the shareholder wealth maximization model of the firm: V0•(shares outstanding) = ??t=1 (? t ) / (1+ke)t + Real Option Value
a. Decrease the required rate of return (ke). b. Decrease the stream of profits (?t). c. Decrease the number of periods from ? to 10 periods. d. Decrease the real option value. e. All of the above.
In the presence of heteroskedasticity, the usual OLS estimates of:
A. standard errors are valid, whereas the t statistics and F statistics are invalid. B. t statistics are valid, but the standard errors and F statistics are invalid. C. F statistics are valid, but the standard errors and t statistics are invalid. D. standard errors, t statistics, and F statistics are invalid.