Question 1

The number of sellers is the largest in oligopoly.

Accepted Answer

A) True 
 B)False

Question 2

An oligopolist operating with a kinked demand curve would expect rivals to match both its price increases and price decreases.

Accepted Answer

A) True 
 B)False

Question 3

An oligopoly is characterised by having:

Accepted Answer

A) a low-concentration ratio and a few large independent firms. 
B) a high-concentration ratio and a few large independent firms. 
C) many small firms that cannot dominate the market. 
D) a few large independent firms. 
A) a low-concentration ratio and a few large independent firms. 
B) a high-concentration ratio and a few large independent firms. 
C) many small firms that cannot dominate the market. 
D) a few large independent firms.

Question 4

Exhibit 9-1 A monopolistic competitive firm
  
-As presented in Exhibit 9-1,the short-run,profit-maximising output for the monopolistic competitive firm is:

Accepted Answer

A) zero units per day 
B) 200 units per day. 
C) 400 units per day. 
D) 600 units per day. 
E) 800 units per day. 
A) zero units per day 
B) 200 units per day. 
C) 400 units per day. 
D) 600 units per day. 
E) 800 units per day.

Question 5

In order to make oil profits as large as possible,OPEC meets to set oil production quotas for its members.OPEC is best classified as a:

Accepted Answer

A) monopoly. 
B) cartel. 
C) kinked demand industry. 
D) price leadership industry. 
A) monopoly. 
B) cartel. 
C) kinked demand industry. 
D) price leadership industry.

Question 6

Which of the following is true about advertising by a firm?

Accepted Answer

A) It is always successful in increasing demand for a firm's product. 
B) It attempts to increase demand and to make demand more elastic. 
C) It can attract severe penalties if firms are engaged in false or misleading advertising. 
D) It allows large firms to become monopolists. 
A) It is always successful in increasing demand for a firm's product. 
B) It attempts to increase demand and to make demand more elastic. 
C) It can attract severe penalties if firms are engaged in false or misleading advertising. 
D) It allows large firms to become monopolists.

Question 7

Oligopoly is a market structure characterised by:

Accepted Answer

A) barriers to enter and mutual interdependence. 
B) barriers to exit and independent pricing decisions. 
C) lack of control over prices. 
D) a differentiated product and independent decisions. 
A) barriers to enter and mutual interdependence. 
B) barriers to exit and independent pricing decisions. 
C) lack of control over prices. 
D) a differentiated product and independent decisions.

Question 8

Both homogeneous and differentiated product can be found in which market?

Accepted Answer

A) Perfect competition. 
B) Oligopoly. 
C) Monopolistic competition. 
D) Monopoly. 
A) Perfect competition. 
B) Oligopoly. 
C) Monopolistic competition. 
D) Monopoly.

Question 9

A kinked demand curve reflects a tendency on the part of an oligopolist to do which of the following?

Accepted Answer

A) Follow price increases but not price reductions. 
B) Follow price reductions but not price increases. 
C) Be unconcerned with rivals' behaviour. 
D) None of the above. 
A) Follow price increases but not price reductions. 
B) Follow price reductions but not price increases. 
C) Be unconcerned with rivals' behaviour. 
D) None of the above.

Question 10

Exhibit 9-1 A monopolistic competitive firm
  
-As represented in Exhibit 9-1,the maximum long-run economic profit earned by this monopolistically competitive firm per day is:

Accepted Answer

A) zero. 
B) $200. 
C) $1000. 
D) $20 000. 
A) zero. 
B) $200. 
C) $1000. 
D) $20 000.

Question 11

It is difficult to talk conclusively about the allocation of resources in an oligopoly because:

Accepted Answer

A) entry is impossible in oligopolies. 
B) both price and output can be higher in oligopolies than in perfect competition. 
C) the level of competition varies greatly in oligopolistic markets. 
D) non-price competition is rare in an oligopoly. 
A) entry is impossible in oligopolies. 
B) both price and output can be higher in oligopolies than in perfect competition. 
C) the level of competition varies greatly in oligopolistic markets. 
D) non-price competition is rare in an oligopoly.

Question 12

Firms in monopolistic competition are price takers.

Accepted Answer

A) True 
 B)False

Question 13

The monopolistically competitive firm:

Accepted Answer

A) (like a firm in a competitive market) will earn an economic profit in the long run. 
B) (unlike a monopolist) will not earn an economic profit in the long run. 
C) (like a monopolist) will not earn an economic profit in the long run. 
D) (unlike a firm in a competitive market) will not earn an economic profit in the long run. 
A) (like a firm in a competitive market) will earn an economic profit in the long run. 
B) (unlike a monopolist) will not earn an economic profit in the long run. 
C) (like a monopolist) will not earn an economic profit in the long run. 
D) (unlike a firm in a competitive market) will not earn an economic profit in the long run.

Question 14

Which of the following statements best describes firms under monopolistic competition?

Accepted Answer

A) There is little price or quality competition. 
B) The firms compete using quality, location, advertising and price. 
C) Firms do not compete using advertising. 
D) There is little competition between firms. 
A) There is little price or quality competition. 
B) The firms compete using quality, location, advertising and price. 
C) Firms do not compete using advertising. 
D) There is little competition between firms.

Question 15

In monopolistically competitive industry,the long-run outcome is:

Accepted Answer

A) zero accounting profit. 
B) zero economic profit. 
C) positive economic profit. 
D) negative economic profit. 
A) zero accounting profit. 
B) zero economic profit. 
C) positive economic profit. 
D) negative economic profit.

Question 16

In a monopolistically competitive market,sellers sell a differentiated product because:

Accepted Answer

A) there is a very low cross-price elasticity of demand between the products. 
B) there is a valuable difference between sellers' products. 
C) sellers' products are not close substitutes. 
D) sellers cannot influence the market price. 
A) there is a very low cross-price elasticity of demand between the products. 
B) there is a valuable difference between sellers' products. 
C) sellers' products are not close substitutes. 
D) sellers cannot influence the market price.

Question 17

We can represent the entry of new firms into a monopolistically competitive market by making the existing firms':

Accepted Answer

A) demand curves shift downward. 
B) demand curves shift upward. 
C) cost curves shift downward. 
D) cost curves shift upward. 
A) demand curves shift downward. 
B) demand curves shift upward. 
C) cost curves shift downward. 
D) cost curves shift upward.

Question 18

The entry of new firms into a monopolistically competitive industry will shift the:

Accepted Answer

A) market demand curve to the right. 
B) market demand curve to the left. 
C) existing firm's demand curve to the right. 
D) existing firm's demand curve to the left. 
E) market supply curve to the left. 
A) market demand curve to the right. 
B) market demand curve to the left. 
C) existing firm's demand curve to the right. 
D) existing firm's demand curve to the left. 
E) market supply curve to the left.

Question 19

Game theory provides a framework for studying:

Accepted Answer

A) games and attitudes. 
B) relationships within the firm. 
C) output decisions in perfect competition. 
D) strategic behaviour in an oligopoly. 
E) price decisions in monopoly. 
A) games and attitudes. 
B) relationships within the firm. 
C) output decisions in perfect competition. 
D) strategic behaviour in an oligopoly. 
E) price decisions in monopoly.

Question 20

Which of the following is true in monopolistic competition?

Accepted Answer

A) In the long run, the monopolistically competitive firm earns positive economic profit. 
B) In the long run, monopolistic competition produces the output that would minimise average total cost. 
C) In the long run, monopolistic competition produces less than the output that would minimise average total cost. 
D) In the long run, the monopolistically competitive firm charges the same price as a monopoly. 
A) In the long run, the monopolistically competitive firm earns positive economic profit. 
B) In the long run, monopolistic competition produces the output that would minimise average total cost. 
C) In the long run, monopolistic competition produces less than the output that would minimise average total cost. 
D) In the long run, the monopolistically competitive firm charges the same price as a monopoly.

The number of sellers is the largest in oligopoly.

An oligopolist operating with a kinked demand curve would expect rivals to match both its price increases and price decreases.

An oligopoly is characterised by having:

Exhibit 9-1 A monopolistic competitive firm -As presented in Exhibit 9-1,the short-run,profit-maximising output for the monopolistic competitive firm is:

In order to make oil profits as large as possible,OPEC meets to set oil production quotas for its members.OPEC is best classified as a:

Which of the following is true about advertising by a firm?

Oligopoly is a market structure characterised by:

Both homogeneous and differentiated product can be found in which market?

A kinked demand curve reflects a tendency on the part of an oligopolist to do which of the following?

Exhibit 9-1 A monopolistic competitive firm -As represented in Exhibit 9-1,the maximum long-run economic profit earned by this monopolistically competitive firm per day is:

It is difficult to talk conclusively about the allocation of resources in an oligopoly because:

Firms in monopolistic competition are price takers.

The monopolistically competitive firm:

Which of the following statements best describes firms under monopolistic competition?

In monopolistically competitive industry,the long-run outcome is:

In a monopolistically competitive market,sellers sell a differentiated product because:

We can represent the entry of new firms into a monopolistically competitive market by making the existing firms':

The entry of new firms into a monopolistically competitive industry will shift the:

Game theory provides a framework for studying:

Which of the following is true in monopolistic competition?

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 9: Monopolistic competition and oligopoly

The number of sellers is the largest in oligopoly.

An oligopolist operating with a kinked demand curve would expect rivals to match both its price increases and price decreases.

An oligopoly is characterised by having:

Exhibit 9-1 A monopolistic competitive firm -As presented in Exhibit 9-1,the short-run,profit-maximising output for the monopolistic competitive firm is:

In order to make oil profits as large as possible,OPEC meets to set oil production quotas for its members.OPEC is best classified as a:

Which of the following is true about advertising by a firm?

Oligopoly is a market structure characterised by:

Both homogeneous and differentiated product can be found in which market?

A kinked demand curve reflects a tendency on the part of an oligopolist to do which of the following?

Exhibit 9-1 A monopolistic competitive firm -As represented in Exhibit 9-1,the maximum long-run economic profit earned by this monopolistically competitive firm per day is:

It is difficult to talk conclusively about the allocation of resources in an oligopoly because:

Firms in monopolistic competition are price takers.

The monopolistically competitive firm:

Which of the following statements best describes firms under monopolistic competition?

In monopolistically competitive industry,the long-run outcome is:

In a monopolistically competitive market,sellers sell a differentiated product because:

We can represent the entry of new firms into a monopolistically competitive market by making the existing firms':

The entry of new firms into a monopolistically competitive industry will shift the:

Game theory provides a framework for studying:

Which of the following is true in monopolistic competition?

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters