1. How would you characterize the strategy for competing internationally that Ford was pursuing prior to the arrival of Alan Mulally in 2006? What were the benefits of this strategy? What were the costs? Why was Ford pursuing this strategy? 2. What strategy is Mulally trying to get Ford to pursue with his One Ford initiative? What are the benefits of this strategy? Can you see any drawbacks? 3. Does the One Ford initiative imply that Ford will now ignore national and regional differences in demand?

1. Consider the following game matrix. Player A Answer: Top Bottom Left a, b e, f Player B Right c, d g, h (a) If top and left are strictly dominant strategies, then what do we know the relationship of the parameters? (b) If (top, left) is a Nash equilibrium, then what do we know the relationship of the parameters? Answer: (c) If top and left are strictly dominant strategies, will (top, left) be a Nash equilibrium? Why? Answer: (d) If (top, left) is a Nash equilibrium, must the strategies be strictly dominant strategies? Why? Answer:

Table: Two Rival Gas Stations Speedy Gas High Price. Low Price $100, $100 $150, $25 High Price $25, $150 Swifty Gas Low Price $50, $50 Look at the table Two Rival Gas Stations, which shows a payoff matrix for two gas stations in a small town. Each firm can set either a high price or a low price, and customers view these two firms as nearly perfect substitutes. Profits in each cell of the payoff matrix are given as (Swifty, Speedy). If both firm know that they will play the same game repeatedly for many time, both of them will choose tit-for-tat strategy. After they play the game for 10 times, what will be the Speedy Gas's total payoff for the 10 times: O $100 O $500 O $1500 O $150 O None of these options is correct.

Which of the following is TRUE about the pharmaceutical industry?   a. In the United States drug companies can receive a patent of 100 years for each drug they develop   b. Lowering the length of patents could induce greater innovation and new drug development.   c. Raising the length of patents would lower profits of pharmaceutical companies   d. Price controls in other countries make existing drugs more affordable overseas but they decrease the overall rate of innovation for new drugs.

6) Assume that Incom Fighter Systems is suing the New Republic for breach of contract. They have filed suit for 100 million galactic credits due to a cancelled X-Wing order. However, before the case goes to trial, the two parties can try and negotiate a settlement. The New Republic can make an offer, and then Incom can either accept the offer or press forward with the suit. (Assume there is just a single offer, and no counteroffers). Each side believes that Incom has a 70% chance of winning the lawsuit if it ends up in court. In addition, Incom would have to pay 15 million credits in lawyers fees, while the New Republic would pay 5 million if the case goes to trial. Draw the game, then solve it to determine its SPNE. What happens? How much does each side end up with?

(Figure: Oligopoly Pricing Strategy in Wireless TV Market II) Use Figure: Oligopoly Pricing Strategy in Wireless TV Market II. The noncooperative equilibrium in the cable TV market occurs when: Next Wireless Supreme Wireless High price Low price High price Next Wireless earns $100,000 Supreme Wireless earns $100,000 Next Wireless earns $80,000 Supreme Wireless earns $130,000 Low price Next Wireless earns $130,000 Supreme Wireless earns $80,000 Next Wireless earns $90,000 Supreme Wireless earns $90,000 O Next Wireless sets a high price and earns $80,000, and Supreme Wireless sets a low price and earns $130,000. O both firms set a high price, and each earns $100,000. K O Next Wireless sets a low price and earns $130,000, and Supreme Wireless sets a high price and earns $80,000. O both firms set a low price, and each earns $90,000.

1. Suppose you are the economic adviser of a company producing three brands of mobile phones; Nokia 10, Samsung X and iPhone Z. Suppose further that, your company currently sells 120 Units of iPhone Z at ¢800 per unit, 150 units of Samsung X at ¢800 per unit and 200 units of Nokia 10 at ¢100 per unit, but in a bid to maximize profit, the company’s managing director proposes an increase in price of Samsung X from ¢800 to ¢1000 per unit for which quantity demanded is anticipated to fall from 150 to 100 units; iPhone Z from ¢800 to ¢1200 per unit for which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from ¢100 to ¢200 per unit for which quantity demanded is expected to fall from 200 to 100 units. I. Using the mid-point formula, compute the price elasticity of demand for each brand. II. From your answer in i, what is the type and economic interpretation of each brand’s value of elasticity

In a game theory payoff matrix. Your company (A) and a major competitor (B) havetwo potential strategies: to advertise or to not advertise during the Super Bowl. The payoffs in each cell represent the change in firm profits from advertising.   How would you create payoffs in each cell such that the Nash equilibrium is that both firms advertise despite having a higher profit if neither firm advertised

Sonic Enter Stay Out Dairy Queen (1000, 8000) High Prices, Low Prices (3000, 5000) (-1000, 4000) Consider the entry-deterrence game shown on the game tree above. Use this information to answer the questions #14 and #15. 14. In this situation, Dairy Queen has an incentive to threaten high prices, which would be credible. b. an incentive to threaten low prices, which would be credible. an incentive to threaten high prices, which would be an empty threat. d. an incentive to threaten low prices, which would be an empty threat. а. с. е. no incentive to make a threat. 15. Dairy Queen will receive a payoff of in the SPE of this game. a. $1,000 b. $3,000 c. $4,000 d. $5,000 e. $8,000