Sample-exam-(ME)

1ManagerialEconomicsSampleExamandSolution(Instructor:WenZhou)Instruction:Thisisaclosed-bookexam.Youhavetwohourstofinish.Theexamconsistsoftwoparts.PartIaremultiplechoicequestions.PartIIhasoneessayquestionandtwocalculationquestions.Additionalinstructionscanbefoundseparatelyineachpart.Pleasemakesureyouproceedtothe“Endofexam”.PartIMultipleChoiceQuestions(2ptseach)Instruction:Eachquestionhasonlyonecorrectanswer.Makesureyoureadallthechoicesbeforechoosingtheanswer.Indicateyouranswerbycirclingtheletterofyourchoiceorwritingtheletterbesideeachquestion.1.Inasimultaneousgame,aplayershouldalwaysuse______.a.thesamestrategyashisrival’sb.hisbeststrategyc.backwardinductiond.Nashequilibriume.noneoftheabove2.Whenthefixedcostofproductionincreases,amonopolistshould__________.a.raisehispriceb.lowerhispricec.raisehisdemandd.lowerhisdemande.noneoftheabove3.ThesameiPhoneissoldatahigherpriceinJapanthaninChina.Thisisanexampleof____.a.versioningb.uniformpricingc.directdiscriminationd.indirectdiscrimination4.Ifthedemandisadownward-slopingstraightline,thenthedemandelasticity________.2a.isthesameeverywhereonthelineb.ismoreelasticwhenpriceishigherc.ismoreelasticwhenthepriceislowerd.noneoftheabove5.Intwo-partpricing,theoptimalunitpricemustequalto_____.a.buyersurplusb.sellersurplusc.marginalcostd.fixedcoste.zero6.Aconsumer’sdemandisp=10-q,andaseller’smarginalcostis2.Howmuchistheconsumer’sbuyersurplusatp=4?a.$6b.$18c.$24d.$327.Ifthedemandiselasticatthecurrentprice,asellercanalwaysraisehisprofitsby____.a.raisinghispriceb.loweringhispricec.raisinghismarginalcostd.loweringhisdemande.noneoftheabove8.Aproduct’smarginalcostofproduction_____.a.doesnotchangeatallb.willeventuallydeclinec.willincreasewhenthefixedcostincreasesd.noneoftheabove9.Inacompetitivemarket,aseller’smarginalcostofthelastunitthathesuppliesis________marketprice.a.greaterthanb.equaltoc.lessthand.alloftheabovearepossible310.Amonopolistexercisingdirectpricediscriminationshould_________.a.offeramenuofchoicesandletconsumersself-selectb.worryaboutcannibalizationc.chargeahigherpriceinamarketwithless-elasticdemandd.chargeahigherpriceinamarketwithmore-elasticdemand11.Ifamonopolistcanraisehisprofitbyraisinghis(uniform)price,thedemandmustbe_____attheoriginalpricelevel.a.inelasticb.elasticc.unitelastic(i.e.,theelasticityis-1)d.alltheabovearepossible12.Demandelasticityis______.a.unitfreeb.alwayspositivec.apercentaged.alloftheabove13.ToafulltimeMBAstudent,theincomethatheorshecouldhaveearnedwhenworkinginsteadofstudyingisa(n)_____.a.sunkcostb.opportunitycostc.sunkbenefitd.realbenefit14.Threestudentsaretryingtobuyusedtextbookswithvaluations$100,50and70,respectively.Amonopolysellercansellbookstothesestudentsortoabookstorefor$30each.Whatistheoptimaluniformpricethatthesellerchargestothesestudents?a.100b.70c.50d.3015.Insequentialgames,____.a.thefirstmoverhasanadvantageb.thesecondmoverhasanadvantage4c.botharepossible16.InPrisoners’Dilemma,___.a.onlyoneplayerhasadominantstrategyb.bothplayershaveadominantstrategyc.theoutcomeisalsotheuniqueNashequilibriumofthegamed.theoutcomeisinferiorforbothplayersthanwhenbothusetheirdominatedstrategiese.(b),(c)and(d)areallcorrect17.Asimultaneousgame______.a.hasonlyoneNashequilibriumb.canhavemultipleequilibria18.Inazero-sumgame,____.a.thetwoplayers’payoffsalwaysadduptozerob.itispossibletohavewin-winc.itisimpossibletohavewin-wind.atleastoneplayer’spayoffis0insomeoutcomes19.Astrategicmove____.a.alwaysinvolvespolitics,internationalrelationsormilitaryactionsb.isabigplanc.isaplanthatguaranteesvictoryd.isanactionthatinfluencesotherplayers’beliefsoractionsthatwillultimatelybenefitthemover20.Whenaplayerhasadominantstrategy,_____.a.theoutcomeisalwaysaninferioroneb.hisopponentmustalsohaveadominantstrategyc.heshouldconsiderhisopponent’srationalityd.noneoftheaboveiscorrectPartIIEssayQuestionsandCalculations(41ptsintotal)Instruction:Thefirstquestionisanessayquestion.Ihatelengthyanswers.Writingtoomuchtendstolowerratherthanraisingyourmark,asthecorrectanswermaybeburiedinirrelevantandincorrectstatements.Eachquestionrequiresonlyafewsentencestoanswer.Youwillbepenalizedifyouwritemorethanfivelines.51.Microsoftoffersspecialdiscountstostudents.Otherpublishershavedevelopedspecial“student”editionsoftheirsoftwarewithfewerfeaturesthantheregularpackages.(12pts)(a)Isthestudentdemandmoreorlesselasticthanthedemandfromtheaverageusersofsoftware?Why?(3pts)(b)Isthestudentdiscountaformofdirectorindirectsegmentpricediscrimination?Howisitimplemented?(3pts)(c)Whatisthepurposeofdevelopinglesspowerful“student”editions?(3pts)(d)Shouldsoftwarepublishersalsoofferdiscountstoseniorcitizensordevelop“seniorcitizen”editions?(3pts)Instruction:Thenexttwoquestionsarecalculations.Writeyouranswerinthespacebeloweachquestion.Writedownnecessarystepsbutmakeyouranswersconcise.2.Amonopolistfacesademandofp=24-q.Hismarginalcostis$4perunit,andthereisnofixedcost.(14ptsintotal)(a)Writedownthemonopolist’smarginalrevenueasafunctionofq.(2pts)(b)Howmuchisthemonopolist’soptimaluniformprice?(2pts)(c)Howmuchisthemonopolist’sprofit?(1pt)Nowsu