QUESTION 1

You are considering flying one-way from Brisbane to Sydney, or Sydney to Brisbane, and it costs $169 with Qantas.A return flight from either Brisbane or Sydney costs $249 with Qantas.In this case, you could argue that Qantas is:

1. using first degree price discrimination for the return flight.
2. using second degree price discrimination for the return flight.
3. is not using price discrimination for the return flight.

Which of the above statements are true:

1. Only1is true.
2. Only 2 is true.
3. Both 1 and 2 are true.
4. Both 2 and 3 are true.
5. All three are true.

QUESTION 2

Clive runs his own cinema. He offers pensioners discounted tickets. However, he does not offer this discount on newly released movies.This is a result of the number of tickets demanded being greater than what he can supply while also having to employ additional staff to service the extra customers.

Which of the following statements are true:

1. Clive is third degree price discriminating by offering pensioners a discount.
2. Clive is using peak load pricing by offering pensioners a discount.
3. Clive is third degree price discriminating by not offering discount tickets to newly released films.
4. Clive is using peak load pricing by not offering discounts on tickets to newly released films.

QUESTION 3

Taylor Swift is playing a concert at Suncorp Stadium in Brisbane. Tickets are $150 each, or $500 each for the VIP Package which includes the opportunity to meet Taylor Swift.

Select the item from the list provided to make the following statements true.

Taylor Swift's pricing strategy indicates use of __________.

Johnny purchases some Taylor Swift tickets with the intention of selling these for a higher price. He is engaging in __________.

If the concert does sell out it,and people like Johnny are unable to sell their tickets for a higher price,the market can be considered to have been__________.

1.First degree price discrimination2.Second degree price discrimination3.Third degree price discrimination4.Peak load pricing5.Pricing power6.Arbitrage7.Inefficient8.Collusion9.Dominant10.Dominated11.Prisoner's dilemma12.Efficient

QUESTION 4

1. Tina and Nick run the advertising campaigns of the University of Queensland and the Queensland University of Technology, respectively. The two are attempting to determine how much money they should spend on advertising their university in order to secure prospective undergraduate students. Both know that how much they spend will be influenced by how much the other decides to spend, as their advertising will become more or less effective as the other spends a smaller or larger figure, respectively. They can either spend a Large, Medium or Small amount on advertising and the positive payoff from this spending is shown in the table.If initially Tina and Nick are not allowed to cooperated, they would arrive at a decision.Will this decision change if the two players are then allowed to cooperate?Type Y for Yes or N for No.