Question 1

Exhibit 11-1  
-Refer to Exhibit 11-1. The profit-maximizing, monopolistically competitive firm as represented in the figure

Accepted Answer

A) is in long-run equilibrium. 
B) is earning only a normal profit in the short run. 
C) is making an economic profit in the short run. 
D) will earn the same amount of profit in the short run as in the long run. 
E) is incurring an economic loss in the short run. 
A) is in long-run equilibrium. 
B) is earning only a normal profit in the short run. 
C) is making an economic profit in the short run. 
D) will earn the same amount of profit in the short run as in the long run. 
E) is incurring an economic loss in the short run.

Question 2

Oligopoly is an industry characterized by

Accepted Answer

A) independence of sellers. 
B) free entry. 
C) no product differentiation. 
D) a few sellers. 
E) free competition. 
A) independence of sellers. 
B) free entry. 
C) no product differentiation. 
D) a few sellers. 
E) free competition.

Question 3

Why is game theory often more useful than graphs in analyzing oligopoly?

Accepted Answer

Oligopoly is characterized mainly by the

Question 4

In monopoly and monopolistic competition, price is greater than marginal cost. This is an indication that

Accepted Answer

A) both industries result in product variety. 
B) both industries make economic profits in the long run. 
C) there are barriers to entry in both types of industries. 
D) marginal costs must be very low in both types of industries. 
E) both industries result in deadweight loss. 
A) both industries result in product variety. 
B) both industries make economic profits in the long run. 
C) there are barriers to entry in both types of industries. 
D) marginal costs must be very low in both types of industries. 
E) both industries result in deadweight loss.

Question 5

Advertising may do any of the following except

Accepted Answer

A) mislead consumers into thinking one product is better than another. 
B) inform consumers of how a product is different from others. 
C) persuade individuals to continue buying a product even when they do not need it. 
D) inform consumers of a product's existence. 
E) persuade people to try a product. 
A) mislead consumers into thinking one product is better than another. 
B) inform consumers of how a product is different from others. 
C) persuade individuals to continue buying a product even when they do not need it. 
D) inform consumers of a product's existence. 
E) persuade people to try a product.

Question 6

When oligopolistic firms engage in Cournot competition, the result is

Accepted Answer

A) a higher equilibrium price but lower equilibrium quantity than occur in a monopoly. 
B) a higher equilibrium price but lower equilibrium quantity than occur in perfect competition. 
C) a higher equilibrium price and higher equilibrium quantity than occur in a monopoly. 
D) a lower equilibrium price and lower equilibrium quantity than occur in perfect competition. 
E) the same equilibrium price and equilibrium quantity as occur in a monopoly. 
A) a higher equilibrium price but lower equilibrium quantity than occur in a monopoly. 
B) a higher equilibrium price but lower equilibrium quantity than occur in perfect competition. 
C) a higher equilibrium price and higher equilibrium quantity than occur in a monopoly. 
D) a lower equilibrium price and lower equilibrium quantity than occur in perfect competition. 
E) the same equilibrium price and equilibrium quantity as occur in a monopoly.

Question 7

The prisoner's dilemma is a noncooperative outcome but not a cooperative outcome.

Accepted Answer

A) True 
 B)False

Question 8

In a monopolistically competitive market, firms produce

Accepted Answer

A) an identical product. 
B) totally different products. 
C) similar but not identical products. 
D) products that other firms do not produce. 
E) any kinds of products, but at the same price. 
A) an identical product. 
B) totally different products. 
C) similar but not identical products. 
D) products that other firms do not produce. 
E) any kinds of products, but at the same price.

Question 9

Suppose a government-imposed lump-sum tax on every firm in a monopolistically competitive industry shifts up the average total cost curve without affecting marginal cost. What will happen to the equilibrium number of firms, the quantity produced in the industry, and the long-run price of this industry's product?

Accepted Answer

The number of firms in the ind

Exhibit 11-1 -Refer to Exhibit 11-1. The profit-maximizing, monopolistically competitive firm as represented in the figure

Oligopoly is an industry characterized by

Why is game theory often more useful than graphs in analyzing oligopoly?

In monopoly and monopolistic competition, price is greater than marginal cost. This is an indication that

Advertising may do any of the following except

When oligopolistic firms engage in Cournot competition, the result is

The prisoner's dilemma is a noncooperative outcome but not a cooperative outcome.

In a monopolistically competitive market, firms produce

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters

Exam 11: Product Differentiation, Monopolistic Competition, and Oligopoly

Exhibit 11-1 -Refer to Exhibit 11-1. The profit-maximizing, monopolistically competitive firm as represented in the figure

Oligopoly is an industry characterized by

Why is game theory often more useful than graphs in analyzing oligopoly?

In monopoly and monopolistic competition, price is greater than marginal cost. This is an indication that

Advertising may do any of the following except

When oligopolistic firms engage in Cournot competition, the result is

The prisoner's dilemma is a noncooperative outcome but not a cooperative outcome.

In a monopolistically competitive market, firms produce

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters