ECN 601 EXAM 2 QUESTIONS AND ANSWERS
In a principal-agent relationship - CORRECT ANSWER✅✅The principal wants the agent to act on her
own behalf.
Viceroy Vacations is deciding on how to price its vacation packages. Which of the following strategies
would you suggest? - CORRECT ANSWER✅✅Advertise them as an all-inclusive vacations.
In a two-person repeated game, a tit-for-tat strategy is: - CORRECT ANSWER✅✅When players start by
cooperating and then mimic the other player's last move.
Compared to simple pricing, price discrimination leads to: - CORRECT ANSWER✅✅Both B and C
The optimal strategy in a Vickery auction is to: - CORRECT ANSWER✅✅Bid exactly your value.
Use the table provided to answer the following question. If the groups are of equal size and the firm can
only set one price, how should the firm price the high-end wok? - CORRECT ANSWER✅✅Price low and
sell to both groups.
The general rule to increase profits when two close complementary brands are jointly owned is: -
CORRECT ANSWER✅✅Increase prices for both brands.
The tradeoff between ____ and _____ is represented as the labor supply curve. - CORRECT
ANSWER✅✅Work and leisure
If the VP of a product launch thinks that a particular product would be profitable, but ended up
launching an unprofitable product, this will be a: - CORRECT ANSWER✅✅Type II error
Which of the following is true? - CORRECT ANSWER✅✅Incentive compensation imposes risk on the
agent for which the agent should be compensated
In a principal-agent relationship - CORRECT ANSWER✅✅The principal wants the agent to act on her
own behalf.
Viceroy Vacations is deciding on how to price its vacation packages. Which of the following strategies
would you suggest? - CORRECT ANSWER✅✅Advertise them as an all-inclusive vacations.
In a two-person repeated game, a tit-for-tat strategy is: - CORRECT ANSWER✅✅When players start by
cooperating and then mimic the other player's last move.
Compared to simple pricing, price discrimination leads to: - CORRECT ANSWER✅✅Both B and C
The optimal strategy in a Vickery auction is to: - CORRECT ANSWER✅✅Bid exactly your value.
Use the table provided to answer the following question. If the groups are of equal size and the firm can
only set one price, how should the firm price the high-end wok? - CORRECT ANSWER✅✅Price low and
sell to both groups.
The general rule to increase profits when two close complementary brands are jointly owned is: -
CORRECT ANSWER✅✅Increase prices for both brands.
The tradeoff between ____ and _____ is represented as the labor supply curve. - CORRECT
ANSWER✅✅Work and leisure
If the VP of a product launch thinks that a particular product would be profitable, but ended up
launching an unprofitable product, this will be a: - CORRECT ANSWER✅✅Type II error
Which of the following is true? - CORRECT ANSWER✅✅Incentive compensation imposes risk on the
agent for which the agent should be compensated
