Question 1

Figure 13-1 ​
 
In Figure 13-1, for a monopolistically competitive firm, long-run equilibrium can occur only at the quantity indicated by which point?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 2

Which of the following is an example of tacit collusion?

Accepted Answer

A) OPEC 
B) Copper cartel 
C) Price leadership 
D) Government franchise granted to a utility 
A) OPEC 
B) Copper cartel 
C) Price leadership 
D) Government franchise granted to a utility

Question 3

In Figure 13-3, according to economic theory, the kink in the demand curve will occur at point

Accepted Answer

A) E. 
B) A. 
C) C. 
D) D. 
A) E. 
B) A. 
C) C. 
D) D.

Question 4

Monopolistic competition is different from perfect competition in that every manufacturer

Accepted Answer

A) has a small monopoly, and differentiates the product. 
B) takes the product quality as given, and chooses price. 
C) takes output level as given, but must choose price. 
D) differentiates product, but cannot advertise successfully. 
A) has a small monopoly, and differentiates the product. 
B) takes the product quality as given, and chooses price. 
C) takes output level as given, but must choose price. 
D) differentiates product, but cannot advertise successfully.

Question 5

A cartel is a group of sellers of a single product who have joined together in order to enjoy the advantages of perfect competition.

Accepted Answer

A) True 
 B)False

Question 6

In the long run, a monopolistically competitive firm produces at minimum average cost.

Accepted Answer

A) True 
 B)False

Question 7

Unlike the situation for a firm in perfect competition, positive economic profit exists for firms in monopolistic competition for both the short run and in the long run.

Accepted Answer

A) True 
 B)False

Question 8

The contestable market theory best applies to

Accepted Answer

A) pure monopoly. 
B) oligopoly. 
C) monopolistic competition. 
D) perfect competition. 
A) pure monopoly. 
B) oligopoly. 
C) monopolistic competition. 
D) perfect competition.

Question 9

Monopolies can misallocate resources by restricting output in an attempt to raise prices and profits.

Accepted Answer

A) True 
 B)False

Question 10

Economic theory of market forms between pure monopoly and perfect competition was largely nonexistent until the work of

Accepted Answer

A) Joan Robinson and Edward Chamberlin. 
B) Adam Smith and David Ricardo. 
C) Alfred Marshall and Francis Edgeworth. 
D) Wassily Leontief and Joseph Schumpeter. 
A) Joan Robinson and Edward Chamberlin. 
B) Adam Smith and David Ricardo. 
C) Alfred Marshall and Francis Edgeworth. 
D) Wassily Leontief and Joseph Schumpeter.

Question 11

Sticky prices are a direct result of the kinked demand curve.

Accepted Answer

A) True 
 B)False

Question 12

Monopolistically competitive markets feature high barriers to entry.

Accepted Answer

A) True 
 B)False

Question 13

The apparent stickiness of the price of goods sold by oligopolists can be explained by the

Accepted Answer

A) contestable markets model. 
B) sales maximization model. 
C) kinked demand curve model. 
D) entry deterrence model. 
A) contestable markets model. 
B) sales maximization model. 
C) kinked demand curve model. 
D) entry deterrence model.

Question 14

Repeated games can lead to tacit collusion.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are possible characteristics of oligopoly except

Accepted Answer

A) free entry into the industry. 
B) significant economies of scale. 
C) interdependence among sellers. 
D) homogeneous product. 
A) free entry into the industry. 
B) significant economies of scale. 
C) interdependence among sellers. 
D) homogeneous product.

Question 16

Figure 13-3 ​
 
 
Oligopolist A cuts price in an attempt to enlarge his share of the market. His competitors retaliate with identical price cuts. In this case, in Figure 13-3, oligopolist A will move from point A to which point?

Accepted Answer

A) B 
B) C 
C) D 
D) E 
A) B 
B) C 
C) D 
D) E

Question 17

The demand curve for a monopolistic competitor is likely to be steeper than that of a monopolist.

Accepted Answer

A) True 
 B)False

Question 18

A monopolistic competitor can expect to earn an economic profit in the long run.

Accepted Answer

A) True 
 B)False

Question 19

Game theory is based on the idea that each participant makes decisions based on how she believes the competition will react.

Accepted Answer

A) True 
 B)False

Question 20

The analysis of oligopolistic behavior is difficult because

Accepted Answer

A) there are few real-world examples of oligopolies for economists to study. 
B) oligopolists make decisions independently of each other. 
C) firms in oligopolistic industries react to each other's behavior in many ways. 
D) economists have paid little attention to the topic in recent years and so have not yet applied to it the techniques of modern economic theory. 
A) there are few real-world examples of oligopolies for economists to study. 
B) oligopolists make decisions independently of each other. 
C) firms in oligopolistic industries react to each other's behavior in many ways. 
D) economists have paid little attention to the topic in recent years and so have not yet applied to it the techniques of modern economic theory.

Exam 13: Between Competition and Monopoly

Figure 13-1 ​ In Figure 13-1, for a monopolistically competitive firm, long-run equilibrium can occur only at the quantity indicated by which point?

Which of the following is an example of tacit collusion?

In Figure 13-3, according to economic theory, the kink in the demand curve will occur at point

Monopolistic competition is different from perfect competition in that every manufacturer

A cartel is a group of sellers of a single product who have joined together in order to enjoy the advantages of perfect competition.

In the long run, a monopolistically competitive firm produces at minimum average cost.

Unlike the situation for a firm in perfect competition, positive economic profit exists for firms in monopolistic competition for both the short run and in the long run.

The contestable market theory best applies to

Monopolies can misallocate resources by restricting output in an attempt to raise prices and profits.

Economic theory of market forms between pure monopoly and perfect competition was largely nonexistent until the work of

Sticky prices are a direct result of the kinked demand curve.

Monopolistically competitive markets feature high barriers to entry.

The apparent stickiness of the price of goods sold by oligopolists can be explained by the

Repeated games can lead to tacit collusion.

All of the following are possible characteristics of oligopoly except

Figure 13-3 ​ Oligopolist A cuts price in an attempt to enlarge his share of the market. His competitors retaliate with identical price cuts. In this case, in Figure 13-3, oligopolist A will move from point A to which point?

The demand curve for a monopolistic competitor is likely to be steeper than that of a monopolist.

A monopolistic competitor can expect to earn an economic profit in the long run.

Game theory is based on the idea that each participant makes decisions based on how she believes the competition will react.

The analysis of oligopolistic behavior is difficult because

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

Filters

Figure 13-1 In Figure 13-1, for a monopolistically competitive firm, long-run equilibrium can occur only at the quantity indicated by which point?

Figure 13-3 Oligopolist A cuts price in an attempt to enlarge his share of the market. His competitors retaliate with identical price cuts. In this case, in Figure 13-3, oligopolist A will move from point A to which point?