The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to multiple types of customers
b. the costs of arbitraging the price difference across markets is large
c. the manufacturer acquires the distributer in the higher priced market
d. competition provides little ability for the manufacturer to price above marginal cost
QUESTION 2The demand for dollars is downward sloping because when dollar value rises,
a. Foreigners demand more of US goods and services
b. Foreigners demand less of US goods and services
c. Foreigners demand more dollars
d. It does not depend on the dollar value
QUESTION 3According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:
a. decreasing returns and declining average and marginal costs
b. increasing returns and declining average and marginal costs
c. increasing returns and increasing average and marginal costs
d. decreasing returns and increasing average and marginal costs
e. none of the above
QUESTION 4Mechanisms that manufacturers can use to deal with misaligned retailer incentives include
a. setting a minimum retail price
b. providing an exclusive contract to a single retailed in a market
c. compensating retailers' sales staff for demonstrating, as well as selling, the product
d. All of the above
QUESTION 5An individual in the US wants to buy a car from England which costs 12,00 . pounds. If the exchange rate is 1.75/pound, how much will it cost him in dollar terms?
a. 21,000
b. 6,800
c. 12,000
d. Need more information
QUESTION 6What method of inventory valuation should be used for economic decision-making problems?
a. book value
b. original cost
c. current replacement cost
d. cost or market, whichever is lower
e. historical cost
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