Call 1 solution 2023

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BIE Exam Garrone - Rizzuni 21 June 2023 Multiple-choice questions (10 points) 1. Which one is the correct statement related to vertical integration decisions, according to the efficiency trade-off model? • Agency efficiency is always higher for hierarchy • Agency efficiency is always higher for markets • Technical efficiency is always higher for hierarchy • Technical efficiency is always higher for markets 2. A signal • Is effective in overcoming moral hazard, when it requires more informed parties to bear a part of the costs for their opportunistic behaviour • Is effective in overcoming moral hazard, when it is credible because it would be too costly to be emitted by lower-quality actors • Is effective in overcoming adverse selection, when it is credible because it would be too costly to be emitted by lower-quality actors • Is effective in overcoming adverse selection, when it requires the more informed parties to bear a part of the costs for their opportunistic behaviour 3. Which of the following applications of circular economy in agriculture is a “Recovery” strategy? • Selling fruits and vegetables with aesthetic defects on secondary markets • Producing biogas from biomass • Extracting nutrients from grape pomace for the pharmaceutical industry • Using meat processing residuals to produce animal feed 4. Consider a duopoly in the smartphone market with two firms, Firm A and Firm B. B is the market leader, setting its quantity first, while A is the follower, observing B ’s quantity before determining its own. Cost functions are symmetric and equal to TC(i) = 10q(i). The market demand function is given by P = 100 – Q, where P represents the market price and Q is the aggregate quantity of smartphones sold. The equilibrium is given by • None of the options • q(A) =…