Question 1

Which of the following are U.S.antitrust laws?
i.The Rockefeller Act
ii.The Sherman Act
iii.The Natural Monopoly Act

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  ii only 
D)  i, ii, and iii 
E)  i only 
A)  i and ii 
B)  ii and iii 
C)  ii only 
D)  i, ii, and iii 
E)  i only

Question 2

-The above figure shows the market for the three moving companies in a small nation.If the movers act as perfect competitors,what is the price per mile and the number of miles per year? If the movers collude and act as a single monopoly,what is the price per mile and the number of lines per year?

Accepted Answer

If the movers compete,production will be

Question 3

The range in which a duopoly's output falls is less than or equal to the output level in ________ and more than or equal to the output level in ________.

Accepted Answer

A)  monopolistic competition; monopoly 
B)  monopolistic competition; perfect competition 
C)  perfect competition; monopoly 
D)  monopoly; monopolistic competition 
E)  monopoly; perfect competition 
A)  monopolistic competition; monopoly 
B)  monopolistic competition; perfect competition 
C)  perfect competition; monopoly 
D)  monopoly; monopolistic competition 
E)  monopoly; perfect competition

Question 4

Federal Trade Commission guidelines state that it will examine mergers in markets for which the Herfindahl-Hirschman Index is

Accepted Answer

A)  a positive number. 
B)  below 1,000 points. 
C)  between 1,000 and 1,800, and the merger would reduce the index by 100 points. 
D)  between 1,000 and 1,800, and the merger would increase the index by 100 points. 
E)  more than 1,800. 
A)  a positive number. 
B)  below 1,000 points. 
C)  between 1,000 and 1,800, and the merger would reduce the index by 100 points. 
D)  between 1,000 and 1,800, and the merger would increase the index by 100 points. 
E)  more than 1,800.

Question 5

Oligopoly is

Accepted Answer

A)  always efficient. 
B)  efficient only if the firms cooperate. 
C)  efficient only if the firms play non-repeated games. 
D)  generally not efficient. 
E)  efficient only if the firms innovate. 
A)  always efficient. 
B)  efficient only if the firms cooperate. 
C)  efficient only if the firms play non-repeated games. 
D)  generally not efficient. 
E)  efficient only if the firms innovate.

Question 6

Game theory reveals that

Accepted Answer

A)  the equilibrium might not be the best solution for the parties involved. 
B)  firms in oligopoly are not interdependent. 
C)  each player looks after what is best for the industry. 
D)  if all firms in an oligopoly take the action that maximizes their profit, then the equilibrium will have the largest possible combined profit of all the firms. 
E)  firms in an oligopoly choose their actions without regard for what the other firms might do. 
A)  the equilibrium might not be the best solution for the parties involved. 
B)  firms in oligopoly are not interdependent. 
C)  each player looks after what is best for the industry. 
D)  if all firms in an oligopoly take the action that maximizes their profit, then the equilibrium will have the largest possible combined profit of all the firms. 
E)  firms in an oligopoly choose their actions without regard for what the other firms might do.

Question 7

If the Herfindahl-Hirschman Index in an industry is above 1,800,a merger that increases the Herfindahl-Hirschman Index by over 50 points will

Accepted Answer

A)  be allowed by the government. 
B)  be challenged by the government. 
C)  be encouraged by the government. 
D)  increase competition in that industry. 
E)  never be allowed to happen. 
A)  be allowed by the government. 
B)  be challenged by the government. 
C)  be encouraged by the government. 
D)  increase competition in that industry. 
E)  never be allowed to happen.

Question 8

To determine if a market is an oligopoly,we need to determine if

Accepted Answer

A)  the market's HHI is less than 900. 
B)  there are many firms in the market. 
C)  the firms are so few that they recognize their mutual interdependencies. 
D)  the firms make identical or differentiated products. 
E)  cartels are legal in their market. 
A)  the market's HHI is less than 900. 
B)  there are many firms in the market. 
C)  the firms are so few that they recognize their mutual interdependencies. 
D)  the firms make identical or differentiated products. 
E)  cartels are legal in their market.

Question 9

In the Boeing/Airbus oligopoly example discussed in the text,why did Boeing and Airbus have an incentive to produce more planes than the monopoly outcome?

Accepted Answer

Both Boeing and Airbus wanted to produce

Question 10

In the 1970s,when a gasoline price ceiling was imposed that was below the equilibrium price of gasoline,some gas stations required that buyers of gas also purchase other products sold at the station.This policy is an example of which of the following?

Accepted Answer

A)  price discrimination 
B)  tying arrangements 
C)  exclusive dealing 
D)  requirements contract 
E)  resale price maintenance 
A)  price discrimination 
B)  tying arrangements 
C)  exclusive dealing 
D)  requirements contract 
E)  resale price maintenance

Question 11

All games have which features?

Accepted Answer

A)  prices, rules, and payoffs 
B)  rules, markets, and prices 
C)  rules, strategies, and payoffs 
D)  rules, strategies, and costs 
E)  equilibrium, prices, and quantities 
A)  prices, rules, and payoffs 
B)  rules, markets, and prices 
C)  rules, strategies, and payoffs 
D)  rules, strategies, and costs 
E)  equilibrium, prices, and quantities

Question 12

Herb's Inc.has a large share of its market and is tempted to collude with the few firms that are in its market.Herb's operates in

Accepted Answer

A)  an oligopoly. 
B)  a monopolistically competitive market. 
C)  a monopoly market. 
D)  a perfectly competitive market. 
E)  a collusively protected market. 
A)  an oligopoly. 
B)  a monopolistically competitive market. 
C)  a monopoly market. 
D)  a perfectly competitive market. 
E)  a collusively protected market.

Question 13

Predatory pricing occurs when a firm sets a ________ price to drive competitors out of business with the intention of then setting a ________ price.

Accepted Answer

A)  monopoly; high 
B)  monopoly; low 
C)  low; monopoly 
D)  low; low 
E)  high; monopoly 
A)  monopoly; high 
B)  monopoly; low 
C)  low; monopoly 
D)  low; low 
E)  high; monopoly

Question 14

-The above figure shows the market demand curve for long-distance land-based telephone calls.Suppose the marginal cost of a long-distance telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry.If the firms in the industry operate as perfect competitors,there are ________ minutes of calls made per hour.

Accepted Answer

A)  between 0 and 3 million 
B)  more than 3 million and less than or equal to 5 million 
C)  more than 5 million and less than or equal to 7 million 
D)  more than 7 million and less than or equal to 9 million 
E)  more than 9 million 
A)  between 0 and 3 million 
B)  more than 3 million and less than or equal to 5 million 
C)  more than 5 million and less than or equal to 7 million 
D)  more than 7 million and less than or equal to 9 million 
E)  more than 9 million

Question 15

-The figure above shows that ________ occurs at ________ units and that ________ firms should share the market.

Accepted Answer

A)  the efficient scale; 30; 3 
B)  the lowest marginal cost; 30; 3 
C)  the efficient scale; 45; 2 
D)  the highest level of demand; 45; 2 
E)  an economic profit; 45; 2 
A)  the efficient scale; 30; 3 
B)  the lowest marginal cost; 30; 3 
C)  the efficient scale; 45; 2 
D)  the highest level of demand; 45; 2 
E)  an economic profit; 45; 2

Question 16

If price fixing is necessary because without it a firm will go bankrupt,is the price fixing legal?

Accepted Answer

No,price fixing is always ille

Question 17

A two-firm oligopoly is called a

Accepted Answer

A)  double monopoly. 
B)  cartel. 
C)  duopoly. 
D)  monopolistic oligopoly. 
E)  dual-market. 
A)  double monopoly. 
B)  cartel. 
C)  duopoly. 
D)  monopolistic oligopoly. 
E)  dual-market.

Question 18

Sally's Mom is pretty sure her twins,Tim and John,together cut the hair off Sally's Barbie doll.She talks to them separately and gives them the following options.If they both confess they will have to pay Sally $10 each.If Tim confesses and John does not confess,Tim pays $15 and John pays $8.If Tim does not confess and John confesses,Tim has to pay $8 and John $15.If both do not confess,they both pay her $14.Sally's Mom has them in separate rooms and they cannot talk to each other.
a.Complete the payoff matrix below.
   
b.If they reach the Nash equilibrium,what will Tim and John do?

Accepted Answer

@#IMG-DLM& 
a.The complete payoff matrix

Question 19

Firms in an oligopoly
i.are independent of each other's actions.
ii.can each influence the market price.
iii.charge a price equal to marginal revenue.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 20

A Nash equilibrium is defined as

Accepted Answer

A)  making zero economic profit in the long run. 
B)  forming a cartel with strong penalties for cheaters. 
C)  relying on other game players to realize the benefit of cooperation. 
D)  each player taking the best possible action given the action of the other player. 
E)  each player taking the action that is best for all the players. 
A)  making zero economic profit in the long run. 
B)  forming a cartel with strong penalties for cheaters. 
C)  relying on other game players to realize the benefit of cooperation. 
D)  each player taking the best possible action given the action of the other player. 
E)  each player taking the action that is best for all the players.

Which of the following are U.S.antitrust laws? i.The Rockefeller Act ii.The Sherman Act iii.The Natural Monopoly Act

-The above figure shows the market for the three moving companies in a small nation.If the movers act as perfect competitors,what is the price per mile and the number of miles per year? If the movers collude and act as a single monopoly,what is the price per mile and the number of lines per year?

The range in which a duopoly's output falls is less than or equal to the output level in and more than or equal to the output level in .

Federal Trade Commission guidelines state that it will examine mergers in markets for which the Herfindahl-Hirschman Index is

Oligopoly is

Game theory reveals that

If the Herfindahl-Hirschman Index in an industry is above 1,800,a merger that increases the Herfindahl-Hirschman Index by over 50 points will

To determine if a market is an oligopoly,we need to determine if

In the Boeing/Airbus oligopoly example discussed in the text,why did Boeing and Airbus have an incentive to produce more planes than the monopoly outcome?

In the 1970s,when a gasoline price ceiling was imposed that was below the equilibrium price of gasoline,some gas stations required that buyers of gas also purchase other products sold at the station.This policy is an example of which of the following?

All games have which features?

Herb's Inc.has a large share of its market and is tempted to collude with the few firms that are in its market.Herb's operates in

Predatory pricing occurs when a firm sets a price to drive competitors out of business with the intention of then setting a price.

-The figure above shows that occurs at units and that firms should share the market.

If price fixing is necessary because without it a firm will go bankrupt,is the price fixing legal?

A two-firm oligopoly is called a

Firms in an oligopoly i.are independent of each other's actions. ii.can each influence the market price. iii.charge a price equal to marginal revenue.

A Nash equilibrium is defined as

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

Exam 18: Oligopoly

Which of the following are U.S.antitrust laws? i.The Rockefeller Act ii.The Sherman Act iii.The Natural Monopoly Act

-The above figure shows the market for the three moving companies in a small nation.If the movers act as perfect competitors,what is the price per mile and the number of miles per year? If the movers collude and act as a single monopoly,what is the price per mile and the number of lines per year?

The range in which a duopoly's output falls is less than or equal to the output level in ________ and more than or equal to the output level in ________.

Federal Trade Commission guidelines state that it will examine mergers in markets for which the Herfindahl-Hirschman Index is

Oligopoly is

Game theory reveals that

If the Herfindahl-Hirschman Index in an industry is above 1,800,a merger that increases the Herfindahl-Hirschman Index by over 50 points will

To determine if a market is an oligopoly,we need to determine if

In the Boeing/Airbus oligopoly example discussed in the text,why did Boeing and Airbus have an incentive to produce more planes than the monopoly outcome?

In the 1970s,when a gasoline price ceiling was imposed that was below the equilibrium price of gasoline,some gas stations required that buyers of gas also purchase other products sold at the station.This policy is an example of which of the following?

All games have which features?

Herb's Inc.has a large share of its market and is tempted to collude with the few firms that are in its market.Herb's operates in

Predatory pricing occurs when a firm sets a ________ price to drive competitors out of business with the intention of then setting a ________ price.

-The figure above shows that ________ occurs at ________ units and that ________ firms should share the market.

If price fixing is necessary because without it a firm will go bankrupt,is the price fixing legal?

A two-firm oligopoly is called a

Firms in an oligopoly i.are independent of each other's actions. ii.can each influence the market price. iii.charge a price equal to marginal revenue.

A Nash equilibrium is defined as

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

The range in which a duopoly's output falls is less than or equal to the output level in and more than or equal to the output level in .

Predatory pricing occurs when a firm sets a price to drive competitors out of business with the intention of then setting a price.

-The figure above shows that occurs at units and that firms should share the market.