Question 1

Explain how the courts have ruled on price fixing.

Accepted Answer

Price fixing is always a violation of th

Question 2

For a duopoly,the highest price is charged when the duopoly achieves

Accepted Answer

A)  the competitive outcome. 
B)  the monopoly outcome. 
C)  an outcome between the competitive outcome and the monopoly outcome. 
D)  its noncooperative Nash equilibrium. 
E)  Both answers A and D are correct because both refer to the same price. 
A)  the competitive outcome. 
B)  the monopoly outcome. 
C)  an outcome between the competitive outcome and the monopoly outcome. 
D)  its noncooperative Nash equilibrium. 
E)  Both answers A and D are correct because both refer to the same price.

Question 3

As a result of a wave of mergers in the early part of the twentieth century,which act was passed?

Accepted Answer

A)  the Anti-Merger Act of 1900 
B)  the Sherman Act of 1909 
C)  the Clayton Act of 1914 
D)  the Horizontal Merger Act of 1919 
E)  the Pro-Competition Act of 1912 
A)  the Anti-Merger Act of 1900 
B)  the Sherman Act of 1909 
C)  the Clayton Act of 1914 
D)  the Horizontal Merger Act of 1919 
E)  the Pro-Competition Act of 1912

Question 4

A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player.

Accepted Answer

A)  worst possible action for himself or herself 
B)  best possible action for himself or herself 
C)  most unpredictable possible action 
D)  most mutually beneficial possible action 
E)  best possible action for the other player 
A)  worst possible action for himself or herself 
B)  best possible action for himself or herself 
C)  most unpredictable possible action 
D)  most mutually beneficial possible action 
E)  best possible action for the other player

Question 5

Which of the following is an example of a territorial confinement?

Accepted Answer

A)  preventing a buyer from reselling a product outside a specific area 
B)  selling one product only if another product is purchased 
C)  forcing the purchase of all necessities from a single firm 
D)  prohibiting a seller from selling a competing item 
E)  selling different units of a good at different prices to the same customer 
A)  preventing a buyer from reselling a product outside a specific area 
B)  selling one product only if another product is purchased 
C)  forcing the purchase of all necessities from a single firm 
D)  prohibiting a seller from selling a competing item 
E)  selling different units of a good at different prices to the same customer

Question 6

________ is an agreement between a manufacturer and a distributor on the price at which a product will be resold.

Accepted Answer

A)  Resale price maintenance 
B)  Price discrimination 
C)  Price fixing 
D)  Predatory pricing 
E)  A tying arrangement 
A)  Resale price maintenance 
B)  Price discrimination 
C)  Price fixing 
D)  Predatory pricing 
E)  A tying arrangement

Question 7

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.Which of the following statements is correct?

Accepted Answer

A)  If the firms play this game repeatedly, one would end up charging $20 and the other $10. 
B)  If the firms cooperate, both could make $55,000 in economic profit. 
C)  The Nash equilibrium in this game is for both firms to set P = $20 because that maximizes their combined profit. 
D)  Firm B's strategy is to always set P = $20 because that gives Firm B the highest possible profit. 
E)  If Firm B sets P = $20, then Firm A will maximize its profit by setting its P = $20. 
A)  If the firms play this game repeatedly, one would end up charging $20 and the other $10. 
B)  If the firms cooperate, both could make $55,000 in economic profit. 
C)  The Nash equilibrium in this game is for both firms to set P = $20 because that maximizes their combined profit. 
D)  Firm B's strategy is to always set P = $20 because that gives Firm B the highest possible profit. 
E)  If Firm B sets P = $20, then Firm A will maximize its profit by setting its P = $20.

Question 8

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly?
i.price discrimination
ii.tying arrangements
iii.exclusive dealing

Accepted Answer

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

Question 9

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the efficient scale for one firm is ________ units per hour.

Accepted Answer

A)  2,000 
B)  4,000 
C)  8,000 
D)  10,000 
E)  more than 10,000 
A)  2,000 
B)  4,000 
C)  8,000 
D)  10,000 
E)  more than 10,000

Question 10

Which of the following is found  ONLY  in oligopoly?

Accepted Answer

A)  producers who sell identical products 
B)  one firm's actions affect another firm's profit 
C)  entry into the industry is blocked 
D)  sellers face a downward sloping demand curve for their product 
E)  the firm's demand curve is horizontal 
A)  producers who sell identical products 
B)  one firm's actions affect another firm's profit 
C)  entry into the industry is blocked 
D)  sellers face a downward sloping demand curve for their product 
E)  the firm's demand curve is horizontal

Question 11

-Suppose Intel and AMD can each charge either $300 or $200 for a CPU (the computing unit of a computer).The above table illustrates the payoffs,in millions of dollars,from each of the four possible outcomes that could occur in their duopoly setting.If Intel charges $200 and AMD charges $300,then Intel's profit will be ________ million and AMD's profit will be ________ million.

Accepted Answer

A)  $200; $180 
B)  $320; $160 
C)  $500; $100 
D)  $450; $220 
E)  $500; $220 
A)  $200; $180 
B)  $320; $160 
C)  $500; $100 
D)  $450; $220 
E)  $500; $220

Question 12

The fact that firms in oligopoly are interdependent means that

Accepted Answer

A)  there are barriers to entry. 
B)  one firm's profits are affected by other firms' actions. 
C)  they can produce either identical or differentiated goods. 
D)  there are too many of them for any one firm to influence price. 
E)  they definitely compete with each other so that the price is driven down to the monopoly level. 
A)  there are barriers to entry. 
B)  one firm's profits are affected by other firms' actions. 
C)  they can produce either identical or differentiated goods. 
D)  there are too many of them for any one firm to influence price. 
E)  they definitely compete with each other so that the price is driven down to the monopoly level.

Question 13

Firms in oligopoly can achieve an economic profit

Accepted Answer

A)  always in the long run. 
B)  if they cooperate. 
C)  only if the demand for their products is inelastic. 
D)  only if the demand for their products is elastic. 
E)  if they reach the non-cooperative equilibrium. 
A)  always in the long run. 
B)  if they cooperate. 
C)  only if the demand for their products is inelastic. 
D)  only if the demand for their products is elastic. 
E)  if they reach the non-cooperative equilibrium.

Question 14

If an industry has a Herfindahl-Hirschman index of 800,it is considered a

Accepted Answer

A)  competitive market. 
B)  moderately concentrated market. 
C)  concentrated market. 
D)  monopoly. 
E)  small market. 
A)  competitive market. 
B)  moderately concentrated market. 
C)  concentrated market. 
D)  monopoly. 
E)  small market.

Question 15

Does an oligopoly produce the efficient quantity of output or does it create a deadweight loss? Do the firms want to produce the efficient quantity of output? Explain your answer.

Accepted Answer

An oligopoly might or might not operate

Question 16

-In the figure above,________ firms will share the market and the ________.

Accepted Answer

A)  2; efficient scale is 80 units 
B)  2; efficient scale is 40 units 
C)  3; efficient scale is 40 units 
D)  2; lowest possible price is $20 
E)  2; lowest possible price is $15 
A)  2; efficient scale is 80 units 
B)  2; efficient scale is 40 units 
C)  3; efficient scale is 40 units 
D)  2; lowest possible price is $20 
E)  2; lowest possible price is $15

Question 17

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

Accepted Answer

A)  if the price rise was not predatory 
B)  if the price rise did not measurably increase producer surplus 
C)  never 
D)  if the price rise did not harm consumers in the long run by reducing competition 
E)  if the price rise was necessary to keep one or both bakeries from closing. 
A)  if the price rise was not predatory 
B)  if the price rise did not measurably increase producer surplus 
C)  never 
D)  if the price rise did not harm consumers in the long run by reducing competition 
E)  if the price rise was necessary to keep one or both bakeries from closing.

Question 18

If the HHI for an industry equals 3,200,

Accepted Answer

A)  firms in the industry must enter a cartel in order to earn an economic profit. 
B)  firms in the industry are most likely to make zero economic profit. 
C)  the industry is probably an oligopoly. 
D)  firms in the industry are likely to act independently of each other. 
E)  the industry is almost surely monopolistic competition. 
A)  firms in the industry must enter a cartel in order to earn an economic profit. 
B)  firms in the industry are most likely to make zero economic profit. 
C)  the industry is probably an oligopoly. 
D)  firms in the industry are likely to act independently of each other. 
E)  the industry is almost surely monopolistic competition.

Question 19

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the figure shows a ________ can profitably operate.

Accepted Answer

A)  natural monopoly in which 1 firm 
B)  natural monopoly in which 2 firms 
C)  natural oligopoly in which 3 firms 
D)  natural oligopoly in which 2 firms 
E)  natural oligopoly in which 8 firms 
A)  natural monopoly in which 1 firm 
B)  natural monopoly in which 2 firms 
C)  natural oligopoly in which 3 firms 
D)  natural oligopoly in which 2 firms 
E)  natural oligopoly in which 8 firms

Question 20

If an industry has an HHI of 2,500,the market structure is that of

Accepted Answer

A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  either monopoly or perfect competition, depending on the existence or absence of barriers to entry. 
A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  either monopoly or perfect competition, depending on the existence or absence of barriers to entry.

Explain how the courts have ruled on price fixing.

For a duopoly,the highest price is charged when the duopoly achieves

As a result of a wave of mergers in the early part of the twentieth century,which act was passed?

A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player.

Which of the following is an example of a territorial confinement?

________ is an agreement between a manufacturer and a distributor on the price at which a product will be resold.

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.Which of the following statements is correct?

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly? i.price discrimination ii.tying arrangements iii.exclusive dealing

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the efficient scale for one firm is ________ units per hour.

Which of the following is found ONLY in oligopoly?

The fact that firms in oligopoly are interdependent means that

Firms in oligopoly can achieve an economic profit

If an industry has a Herfindahl-Hirschman index of 800,it is considered a

Does an oligopoly produce the efficient quantity of output or does it create a deadweight loss? Do the firms want to produce the efficient quantity of output? Explain your answer.

-In the figure above, firms will share the market and the .

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

If the HHI for an industry equals 3,200,

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the figure shows a ________ can profitably operate.

If an industry has an HHI of 2,500,the market structure is that of

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

Explain how the courts have ruled on price fixing.

For a duopoly,the highest price is charged when the duopoly achieves

As a result of a wave of mergers in the early part of the twentieth century,which act was passed?

A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player.

Which of the following is an example of a territorial confinement?

________ is an agreement between a manufacturer and a distributor on the price at which a product will be resold.

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.Which of the following statements is correct?

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly? i.price discrimination ii.tying arrangements iii.exclusive dealing

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the efficient scale for one firm is ________ units per hour.

Which of the following is found ONLY in oligopoly?

The fact that firms in oligopoly are interdependent means that

Firms in oligopoly can achieve an economic profit

If an industry has a Herfindahl-Hirschman index of 800,it is considered a

Does an oligopoly produce the efficient quantity of output or does it create a deadweight loss? Do the firms want to produce the efficient quantity of output? Explain your answer.

-In the figure above,________ firms will share the market and the ________.

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

If the HHI for an industry equals 3,200,

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the figure shows a ________ can profitably operate.

If an industry has an HHI of 2,500,the market structure is that of

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

-In the figure above, firms will share the market and the .