Question : Table 14-1 Godrickporter and Star Connections the only two airport shuttle : 1387868

Table 14-1

Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow. Each firm must decide on whether to increase its advertising spending to compete for customers. Table 14-1 shows the payoff matrix for this advertising game.

13) Refer to Table 14-1. Is there a dominant strategy for Godrickporter and if so, what is it?

A) No, its outcome depends on what Star Connections does.

B) Yes, Godrickporter should increase its advertising spending.

C) Yes, Godrickporter should reduce its advertising spending.

D) Yes, Godrickporter’s dominant strategy is to collude with Star Connections.

14) Refer to Table 14-1. Is there a dominant strategy for Star Connections and if so, what is it?

A) No, its outcome depends on what Godrickporter does.

B) Yes, Star Connections should increase its advertising spending.

C) Yes, Star Connections should reduce its advertising spending.

D) Yes, Star Connections’ dominant strategy is to collude with Godrickporter.

15) Refer to Table 14-1. Let’s suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $6,000 and Star Connections earns a profit of $12,000. Is there an incentive for any one firm to increase its advertising budget?

A) No, neither firm has an incentive to raise its advertising spending.

B) Yes, both firms have an incentive to raise their advertising budgets.

C) Yes, Star Connections has an incentive to increase its advertising budget, but Godrickporter does not.

D) Yes, Godrickporter has an incentive to increase its advertising budget, but Star Connections does not.

16) Refer to Table 14-1. What is the Nash equilibrium in this game?

A) There is no Nash equilibrium.

B) Godrickporter increases its advertising budget, but Star Connections does not.

C) Star Connections increases its advertising budget, but Godrickporter does not.

D) Both Godrickporter and Star Connections increase their advertising budgets.

17) Which of the following statements about the prisoner’s dilemma is false?

A) The prisoner’s dilemma in a one-shot game leads to a noncooperative, equilibrium outcome.

B) The prisoner’s dilemma in repeated games could lead to cooperation especially if there is some enforcement mechanism that punishes a player who does not cooperate.

C) Players caught in a prisoner’s dilemma act in selfish ways that lead to an equilibrium that is sub-optimal.

D) The prisoner’s dilemma game can never reach a Nash equilibrium as long as players do not cooperate.

18) Which of the following is an example of a way in which a firm in oligopoly can escape the prisoner’s dilemma?

A) producing more of its product

B) advertising that it will match its rival’s price

C) reneging on a previous tacit agreement with rival firms to charge identical high prices

D) ignoring the pricing decisions of the other firms

19) Consider two oligopolistic industries selling the same product in different locations. In the first industry, firms always match price changes by any other firm in the industry. In the second industry, firms always ignore price changes by any other firm. Which of the following statements is true about these two industries, holding everything else constant?

A) Market prices are likely to be higher in the first industry in which firms always match price changes by rival firms than in the second where firms ignore their rivals’ price changes.

B) Market prices are likely to be lower in the first industry where firms always match price changes by rival firms than in the second where firms ignore their rivals’ price changes.

C) Market prices are likely to be the same in both markets because they are both oligopolistic markets.

D) No conclusions can be drawn about the pricing behavior under these very different firm behaviors.

20) A game in which each player adopts its dominant strategy

A) will not lead to an equilibrium.

B) must be a cooperative game.

C) could result in a Nash equilibrium.

D) can never result in a Nash equilibrium.

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11) Which of the following illustrates a purpose for allocating costs to cost objects?

A) to provide information for economic decisions

B) to reduce competition

C) to determine employee benefit costs

D) to defer income and reduce taxes payable

E) to motivate employees

12) Deciding whether to make a component part or to purchase it, would be an example of which cost allocation purpose?

A) to provide information for economic decisions

B) to motivate managers

C) to determine employee's wages

D) to measure income and assets for reporting to external parties

E) to motivate employees

13) For the economic decision purpose

A) the costs in all six business functions should be included.

B) costs for only one function is included.

C) period costs are not allocated.

D) costing is only related to product pricing.

E) only inventoriable costs under GAAP/IFRS should be included.

14) Which of the following criteria subsidizes poor performers at the expense of the best performers?

A) ability to bear

B) benefit received

C) causality

D) fairness and equity

E) benefits expended

15) The belief that a corporate division with higher sales ought to be allocated more of the company's advertising costs because it must have derived more benefit from the expenditures than a division with lower sales, is an example of which criteria for cost allocation decisions?

A) ability to bear

B) benefits expended

C) causality

D) fairness and equity

E) benefit received

16) Which of the following is not a common criteria used to guide decisions related to cost allocations?

A) ability to bear

B) benefit received

C) causality

D) fairness and equity

E) stable market prices

17) Which of the following is the first step in the cost-allocation decision process?

A) Calculate the cost-allocation rate for each indirect cost pool.

B) Identify the purpose of the cost allocation.

C) Identify the direct inputs that are already measured.

D) Identify the relevant indirect costs included in the cost pool(s) or numerator(s).

E) Analyze the alternatives and select the best one for the denominator.

18) Which of the following is true concerning cost allocation in a multi-product company?

A) Where the indirect costs are variable and each product is assembled sequentially, the causality criterion can guide the choice of a cost allocation base.

B) Where the indirect costs are fixed and each product is assembled sequentially, the causality criterion can guide the choice of a cost allocation base.

C) Where the indirect costs are variable and each product is not assembled sequentially, the causality criterion can guide the choice of a cost allocation base.

D) Where the indirect costs are fixed and each product is not assembled sequentially, the causality criterion can guide the choice of a cost allocation base.

E) Where the indirect costs are variable and the products are produced jointly, it is not possible to identify specific cause-and-effect relationships between work on an individual product and total costs incurred.

19) Which purpose of cost allocation is used to encourage sales representatives to push high-margin products or services?

A) to provide information for economic decisions

B) to motivate managers and other employees

C) to justify costs

D) to measure income and assets for reporting to external parties

E) to compute reimbursement

20) Which purpose of cost allocation is used to decide on the selling price for a customized product or service?

A) to provide information for economic decisions

B) to motivate managers and other employees

C) to justify costs

D) to measure income and assets for reporting to external parties

E) to compute reimbursement