1) Which of the following strategies are used by businesses to capture consumer surplus?

a) Price discrimination

b) Bundling

c) Two-part tariffs

d) All of the above

2) Nash equilibria are stable because

a) They involve dominant strategies

b) They involve zero-sum games

c) They occur in non-cooperative games

d) Once the strategies are chosen, no players have an incentive to negotiate jointly to change them.

e) Once the strategies are chosen, no player has an incentive to deviate unilaterally from them.

3) Bubba Burgers has discovered there are economies of scope available to the restaurant.  Which is most likely to be a response to this discovery?

a) Bubba adds more varied inputs to burger production

b) Bubba expands burger production, focusing on that one good

c) Bubba contracts burger production

d) Bubba adds grilled chicken sandwiches to the menu

e) Bubba cuts back on the diversity of the menu

4) Carolyn knows average total cost and average variable cost for a given level of output.  Which of the following costs can she not determine given this information?

a) Total cost

b) Average fixed cost

c) Variable cost

d) Fixed cost

e) She can determine all of the above costs given the information provided.

5) Karen is an executive at Dell Computer Company, in charge of designing the next version of laptop computers.  She will consider such features as screen size, weight, processor speed, and CD and DVD drives.  Given the fact that it is costly to include more features in new products, why might Karen be interested in data on how much consumers paid for a range of laptops with different attributes?

a) In order to estimate willingness to pay for each feature

b) In order to set an optimal price for the laptops

c) In order to determine the best features to include

d) In order to estimate the willingness to trade off one feature for another