Applied Microeconomics Test
Bank
Course Introduction
Applied Microeconomics focuses on the practical application of microeconomic theories and principles to real-world problems in various markets and industries. The course examines consumer and producer behavior, market dynamics, pricing strategies, government interventions, and the implications of market failures. Through case studies and data analysis, students explore topics such as labor markets, public policy, industrial organization, and welfare economics, developing analytical skills to address complex economic issues across diverse contexts.
Recommended Textbook
Economics of Strategy 6th Edition by David
Besanko
Available Study Resources on Quizplus
14 Chapters
419 Verified Questions
419 Flashcards
Source URL: https://quizplus.com/study-set/1331
Chapter 1: The Power of Principles: an Historical Perspective
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26572
Sample Questions
Q1) How has Atlanta been able to grow as a center of commerce despite its poor water and rail connections?
A) Widespread air transportation
B) New government regulations
C) Improved Financing
D) Better Communications
E) Better technology and innovation
Answer: A
Q2) What significant transportation event brought about the first significant growth of the Great Lakes region?
A) Harnessing of the steam engine
B) Invention of the screw propeller
C) Opening of the Erie Canal
D) Integration of railway system
E) Invention of the railway system
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Economies of Scale and Scope
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26573
Sample Questions
Q1) What kind of economies come from reductions in average costs due to increases in capacity utilization?
A) Short-run economies of scale
B) Short-run economies of scope
C) Long-run economies of scale
D) Long-run economies of scope
E) Fully automated economies
Answer: A
Q2) Examining which of the following is broadly considered one of the easiest ways to measure diversifying activity?
A) Joint Ventures
B) Mergers and acquisitions
C) Internal Business Development
D) Strategic Alliances
E) Collaborative agreements
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: The Vertical Boundaries of the Firm
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26574
Sample Questions
Q1) What is a reason that companies might want to "buy" instead of "make" talent from the market when looking to acquire employees with a particular skill set?
A) External training methods are better than internal ones
B) Companies are always willing to pay more for external employees
C) External training is more advanced (up-to-date) than internal
D) Scale economies can result in fixed education costs while in house education methods may be more expensive
E) Externally trained employees are more likely to become better business leaders
Answer: D
Q2) What problem preventing complete contracts refers to a lack of transparency/equal access to the details surrounding a contract?
A) Agency costs
B) Bounded rationality
C) Performance measurement difficulties
D) Asymmetric information
E) Contract body of law
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Integration and Its Alternatives
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26575
Sample Questions
Q1) Which of the following is true with regard to the difference in exchange costs between an item produced internally firm and an item purchased from an outside supplier through an arm's length market transaction as the level of asset specificity increases?
A) The cost difference is positive for both low and high levels of specificity
B) The cost difference is negative for both low and high levels of specificity
C) The cost difference is negative for low and positive for high levels of specificity
D) The cost difference is positive for low and negative for high levels of specificity
E) As asset specificity increases, the transaction costs of the market exchange decrease
Q2) Which of the following describes when a manufacturer produces some of an input quantity itself and purchases the remaining portion from independent firms?
A) Forward Integration
B) Tapered integration
C) Backward Integration
D) Balanced integration
E) Combined integration
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Competitors and Competition
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26576
Sample Questions
Q1) Based on Bresnahan and Reiss' study of the relationship between concentration and prices,how many firms did they determine generally need to be in a market for price competition to be as intense as it would likely get?
A) 1
B) 2
C) 3
D) 4
E) 5
Q2) Suppose two hot dog stands,Al's & Bob's,position themselves at different ends of a 1000 yard stretch of beach.Assume there are 100 beach goers evenly distributed along the stretch of beach and travel costs are $.01 per yard.If Al charges $1 for his hot dogs and Bob charges $2 for his hot dogs,what is the cost of purchasing a hot dog from each stand for a hungry beachgoer situated at a position D yards from Al's end of the beach? How many consumers will go to Al's and how many will go to Bob's?
Q3) In a three firm market where the market share split is 50%,30% & 20%,what is the Herfindahl index?
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Entry and Exit
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26577
Sample Questions
Q1) What term describes a market where a monopolist cannot raise price above long run average cost?
A) Blockaded
B) Perfectly contestable
C) Accommodated
D) Deterred
E) Predatory
Q2) When are sunk costs a most effective entry barrier?
A) When the incumbent has incurred them and the entrant has not
B) When incumbents have long-standing relationships with suppliers and customers
C) When channels are few and hard to replicate
D) When a firm has a reputation for toughness or competes in multiple markets
E) When marginal costs are low and flooding the market causes large price reductions
Q3) What are the two types of barriers to entry?
A) Legal and strategic
B) Price and Size
C) Structural and strategic
D) Size and Legal
E) Price and Structure
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: The Dynamics Competing Across Time
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26578
Sample Questions
Q1) What is a grim trigger strategy in a two firm repeated game?
A) A strategy where a firm will always aggress regardless of how the other firm acts
B) A strategy where a firm will always cooperate regardless of how the other firm acts
C) A strategy in which a firm is prepared to match whatever changes in strategy the competitor makes
D) A strategy in which a firm initially cooperates and then aggresses for the rest of the game as soon as the opponent aggresses
E) A strategy in which a firm is prepared to aggress when its opponent cooperates and cooperate when its opponent aggresses
Q2) What term refers to situations in which firms can sustain prices in excess of those that would arise in a non-cooperative single-shot price or quantity-setting game?
A) Dedicated pricing
B) Strategic pricing
C) Marginal pricing
D) Cost-plus pricing
E) Cooperative pricing
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Industry Analysis
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26579
Sample Questions
Q1) What term refers to the ability of individual customers to negotiate purchase prices that extract profits from sellers?
A) Substitutes and Complements
B) Competition
C) Customer power
D) Seller power
E) Buyer power
Q2) Which of the following is not a significant entry barrier in the commercial airframe manufacturing market?
A) High development costs
B) Learning curve in production
C) Raw materials and labor
D) Airlines prefer to purchase from the same manufacturer
E) Airlines are reluctant to purchase from startups
Q3) Which of the following is not a part of the five-forces framework?
A) Supplier Power
B) Internal rivalry
C) Regulation
D) Buyer Power
E) Substitutes and Complements
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Strategic Positioning for Competitive Advantage
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26580
Sample Questions
Q1) What term describes the situation when a firm earns a higher rate of economic profit than the average rate of economic profit of other firms competing within the same market?
A) Industry effect
B) Competitive advantage
C) Business unit effect
D) Competitive position
E) Market profitability economics
Q2) Select the letter corresponding to the best answer.For a given consumer,any price-quality combination along the indifference curve yields the _______________.
A) Same consumer surplus
B) Same maximum willingness-to-pay
C) High consumer surplus
D) Low consumer surplus
E) Same competitive advantage
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Information and Value Creation
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26581
Sample Questions
Q1) Which of the following is measured by a report that assesses how a product is produced?
A) Process
B) Inputs
C) Warrantees
D) Outcomes
E) Longevity
Q2) Which of the following would not reduce gaming of report cards?
A) Reporting scores using simple graphics
B) Using simple composite scores
C) Making firms pay for report card results
D) Measure quality at the most aggregate level
E) risk adjust report card scores
Q3) Which of the following best describes the consumer's shopping problem?
A) Having enough money to purchase all necessary goods and services
B) Finding the seller that offers the highest value of B - P
C) Determining the quality of products
D) Locating sellers that provide the required products
E) Selecting between brand products and non-brand products.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Sustaining Competitive Advantage
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26582
Sample Questions
Q1) Which of the following is not a Legal Restriction?
A) Patent
B) Copyright
C) Trademark
D) Intellectual property
E) Operating rights
Q2) Which of the following terms describes a nation's position with regard to the elements (e.g.human resources,infrastructure)of production that are necessary to compete in a particular industry?
A) Factor conditions
B) Demand conditions
C) Supply conditions
D) Related supplier or support industries
E) Strategy, structure, and rivalry
Q3) Which of the following products and services depend on standards?
A) Cellular communications
B) Internet
C) Video gaming
D) High-definition television
E) All of the above
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Performance Measurement and Incentives
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/26583
Sample Questions
Q1) Which of the following is not a principal/agent relationship?
A) Shareholders/Company CEO
B) Shareholders/Company employees
C) Company/Hired counsel
D) Carmaker/Auto part supplier
E) Shareholder/IRS auditors of a company
Q2) Which of the terms best describes the effect that results from supervisors giving all their subordinates average (or above average)grading to avoid making sharp distinctions between those subordinates when evaluating them?
A) Forced ranking system
B) Subjective assessment
C) Ratings balancing
D) Ratings compression
E) Merit ratings system
Q3) What is a benefit of the de-centralized organization coordination solution?
A) Ensures no coordination opportunities are missed
B) Makes the organization more hierarchical
C) Takes advantage of localized information
D) Improves communication
E) Always encourages collaboration
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Strategy and Structure
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26584
Sample Questions
Q1) Aligning individual and group tasks with those of the firm and aligning incentives so that individuals and groups will consistently work in the same direction is known as:
A) Coordination
B) Agency control
C) Accountability
D) Dimensional alignment
E) Unitary functional alignment
Q2) What type of organizational structure is one in which work groups may be organized by function,geography,or customer base,but where relationships between work groups are governed more by often-changing implicit and explicit requirements of common tasks than by the formal lines of authority that characterize other structures?
A) Unitary functional structure
B) Multidivisional structure
C) Matrix structure
D) Network structure
E) Individual structure
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Environment, power, and Culture
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26585
Sample Questions
Q1) Which of the following is not a way firms suffering from dependence relationships can take action to reduce their dependence on buyers or suppliers?
A) Vertical integration
B) Using a monopolist buyer/supplier
C) Long-term contracting
D) Joint ventures
E) Alliances
Q2) What technique did Google use to preserve its "evil-free" culture when going public with an initial public offering in 2004?
A) Used an IPO underwriter
B) Allow clients to purchase underpriced IPO shares
C) Used a "Dutch auction"
D) Committed to sell a certain number of shares at a set price
E) Drastically underpriced its shares (by 200%)
To view all questions and flashcards with answers, click on the resource link above.
16