Exam 15: Managerial Decisions About Information

Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels. -Refer to the table above. Relative to Free Cows, Happy Cows' marginal cost curve is ________, which makes an accurate forecast _______valuable to the managers of Happy Cows.

If a drug company creates a new drug designed to treat common seasonal allergies is approved by the U.S. Food and Drug Association (FDA), which means the drug can be marketed and sold in the U.S., the approval by the FDA is an example of_______ .

A copyright gives the owner all of the following exclusive rights except which one?

In an independent private values sealed- bid second- price auction, if a participant bids more than their valuation this_______ _ an inferior strategy because the high bid_______ _.

As a manager holding an auction with correlated or common values, you want buyers to place bids that are_______ their estimated_______ and sellers to place bids that are close to their estimated_______ .

Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels. -Refer to the table above. Suppose the perfectly competitive market for dairy products had a 40 percent chance of a high price of $3.00 and a 60 percent chance of a low price of $2.00. However, both Happy Cows and Free Cows have revised their probabilities and now believe that the probability of a high price of $3.00 is 80 percent and the probability of a low price of $2.00 is 20 percent. If the managers of Happy Cows want to maximize expected profit based on the new probabilities by how much will they change the quantity produced?

Happy Cows is bidding on a large piece of farm equipment to process their dairy products. The managers of Happy Cows have estimated the additional profit Happy Cows will earn from the piece of equipment and have valued the equipment at $125,000. Happy Cows' value of the farm equipment is _______.

A manager is participating in an auction where values or common or correlated and is not 100 percent certain of the value of the item. The manager_______ reduce their bid below their estimated value to_______ the winner's curse.

Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels. -Refer to the table above. Suppose the perfectly competitive market for dairy products had a 40 percent chance of a high price of $3.00 and a 60 percent chance of a low price of $2.00. However, both Happy Cows and Free Cows have revised their probabilities and now believe that the probability of a high price of $3.00 is 80 percent and the probability of a low price of $2.00 is 20 percent. If the managers of Free Cows want to maximize expected profit based on the new probabilities by how much will they change the quantity produced?

An expected value is the_______average of _______outcomes.

If a firm maximizes its expected profit, it will never produce the quantity that maximizes actual profit.

Firms can protect information in the form of inventions and other industrial know- how under which two types of laws?

A restaurant owner hires a waiter to serve food to customers and clear the tables. The owner wants the waiter to be prompt in bringing out the food and clearing the table once the guests are finished with their meal. The waiter is paid a salary and cannot accept tips. The waiter would prefer to check their Facebook account and take their time waiting the tables. If the waiter does spend considerable time checking their Facebook while the owner is not at the restaurant, which of the following is true?

All of the following are considered trade secrets except which one?

Suppose a heath care provider wants to ensure that its family doctors are offering patients referrals to specialists when appropriate. Offering referrals makes the doctors' work longer as they need to complete considerable paper work. Because the managers of the health care provider cannot monitor doctors during patient visits, the managers require that each doctor refers at least 40 percent of their patients to a specialist each month or face a fine. If less than 40 percent of the patients actually need a referral to a specialist, this policy will result in all of the following occurring except which one?

Suppose parents hire a baby sitter to take care for their young child while they go out to dinner. The parents want the baby sitter to play and read stories to their child while they are away, but the baby sitter would prefer to put the child to bed and watch television. Once the parents leave, if the baby sitter puts the child to bed and watches television, this is an example of_______ .

If a profit- maximizing manager is provided a forecast regression with a R2 equal to 1.00, this allows the manager to produce where_______ marginal revenue is_______ _ the marginal cost.

In the United States, a patent gives the patent holder exclusive rights to an invention for typically how many years?

All else equal, forecasting your firm's demand is likely to be less profitable if any of the following are true except for which one?

The _______nature of patents attempts to balance the social gain from the product against the_______ .