Question 1

Which of the following provisions require a firm to buy all of a particular item from a single firm?

Accepted Answer

A)  tying arrangement 
B)  requirements contracts 
C)  exclusive dealing 
D)  territorial confinement 
E)  quantity discrimination 
A)  tying arrangement 
B)  requirements contracts 
C)  exclusive dealing 
D)  territorial confinement 
E)  quantity discrimination

Question 2

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 3

Resale price maintenance can be illegal

Accepted Answer

A)  under the Clayton Act. 
B)  under the Sherman Act. 
C)  only if the distributors engage in predatory pricing. 
D)  if distributors tell the manufacturer the maximum price at which they will sell the product. 
E)  only when it is combined with territorial confinement. 
A)  under the Clayton Act. 
B)  under the Sherman Act. 
C)  only if the distributors engage in predatory pricing. 
D)  if distributors tell the manufacturer the maximum price at which they will sell the product. 
E)  only when it is combined with territorial confinement.

Question 4

What is meant by the term "exclusive dealing"? Give an example of an exclusive deal.When is it illegal?

Accepted Answer

Exclusive dealing is a contract that pre

Question 5

The figure above shows the market for airplanes.
-Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be ________ and if the firms act as competitors the price will be ________.

Accepted Answer

A)  $13 million per plane; $1 million per plane 
B)  $1 million per plane; $13 million per plane 
C)  $13 million per plane; $13 million per plane 
D)  $1 million per plane; $1 million per plane 
E)  None of the above answers is correct. 
A)  $13 million per plane; $1 million per plane 
B)  $1 million per plane; $13 million per plane 
C)  $13 million per plane; $13 million per plane 
D)  $1 million per plane; $1 million per plane 
E)  None of the above answers is correct.

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

One of the main tools economists use to analyze strategic behavior is

Accepted Answer

A)  the Herfindahl-Hirschman Index. 
B)  game theory. 
C)  cartel theory. 
D)  the collusion index. 
E)  dual theory, which is used to study duopolies. 
A)  the Herfindahl-Hirschman Index. 
B)  game theory. 
C)  cartel theory. 
D)  the collusion index. 
E)  dual theory, which is used to study duopolies.

Question 8

When an oligopoly reduces its price with the intent of driving away its competitors,it is said to be engaging in

Accepted Answer

A)  pricing differential. 
B)  predatory pricing. 
C)  price fixing. 
D)  a price-tying agreement. 
E)  price discrimination. 
A)  pricing differential. 
B)  predatory pricing. 
C)  price fixing. 
D)  a price-tying agreement. 
E)  price discrimination.

Question 9

Which of the following does antitrust law prohibit if it substantially lessens competition or creates a monopoly?
i.acquiring a competitor's shares or assets
ii.territorial confinement
iii.becoming a director of a competing firm

Accepted Answer

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

Question 10

A cartel is most likely to occur in

Accepted Answer

A)  perfect competition as firms compete by reducing cost. 
B)  oligopoly as firms act together to raise prices and increase profits. 
C)  monopolistic competition where firms collude to increase profits. 
D)  oligopoly as firms compete to lower price and increase their own profits. 
E)  monopoly because it faces no competition. 
A)  perfect competition as firms compete by reducing cost. 
B)  oligopoly as firms act together to raise prices and increase profits. 
C)  monopolistic competition where firms collude to increase profits. 
D)  oligopoly as firms compete to lower price and increase their own profits. 
E)  monopoly because it faces no competition.

Question 11

If a firm engages in predatory pricing,it

Accepted Answer

A)  is following marginal cost pricing. 
B)  is following average cost pricing. 
C)  sets a low price to drive rivals out of business. 
D)  has been regulated using a price cap. 
E)  is guilty of price fixing. 
A)  is following marginal cost pricing. 
B)  is following average cost pricing. 
C)  sets a low price to drive rivals out of business. 
D)  has been regulated using a price cap. 
E)  is guilty of price fixing.

Question 12

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 13

The U.S.courts found Microsoft

Accepted Answer

A)  did not violate antitrust law. 
B)  violated the Sherman Act. 
C)  violated the Cellar-Kefauver Act. 
D)  engaged in predatory pricing. 
E)  violated the price discrimination clause of the Clayton Act. 
A)  did not violate antitrust law. 
B)  violated the Sherman Act. 
C)  violated the Cellar-Kefauver Act. 
D)  engaged in predatory pricing. 
E)  violated the price discrimination clause of the Clayton Act.

Question 14

What three characteristics do all games have in common?

Accepted Answer

The all ha

Question 15

-Intel and AMD are a duopoly that produce CPU chips.Intel and AMD can conduct R&D or they can not conduct R&D.The table above shows the payoff matrix for the two firms.AMD is playing a tit-for-tat strategy and Intel did not conduct R&D last period.Then,of the following answers,Intel's total profit for the next two periods is the highest if Intel ________ R&D this period and ________ R&D next period.

Accepted Answer

A)  conducts; conducts 
B)  does not conduct; conducts 
C)  conducts; does not conduct 
D)  does not conduct; does not conduct 
E)  conducts; either conducts or does not conduct because the profit is the same in either case 
A)  conducts; conducts 
B)  does not conduct; conducts 
C)  conducts; does not conduct 
D)  does not conduct; does not conduct 
E)  conducts; either conducts or does not conduct because the profit is the same in either case

Question 16

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 17

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 18

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit ________ and the first firm's profit ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  increases; does not change 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  increases; does not change

Question 19

"If an industry's Herfindahl-Hirschman Index is below 1,000,a merger between any two firms in that industry will be disallowed." Comment on the accuracy of the previous statement.

Accepted Answer

The statement is incorrect in at least t

Question 20

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.

Which of the following provisions require a firm to buy all of a particular item from a single firm?

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

Resale price maintenance can be illegal

What is meant by the term "exclusive dealing"? Give an example of an exclusive deal.When is it illegal?

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be and if the firms act as competitors the price will be .

Game theory reveals that

One of the main tools economists use to analyze strategic behavior is

When an oligopoly reduces its price with the intent of driving away its competitors,it is said to be engaging in

Which of the following does antitrust law prohibit if it substantially lessens competition or creates a monopoly? i.acquiring a competitor's shares or assets ii.territorial confinement iii.becoming a director of a competing firm

A cartel is most likely to occur in

If a firm engages in predatory pricing,it

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.

The U.S.courts found Microsoft

What three characteristics do all games have in common?

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

All games have which features?

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit and the first firm's profit .

"If an industry's Herfindahl-Hirschman Index is below 1,000,a merger between any two firms in that industry will be disallowed." Comment on the accuracy of the previous statement.

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

Getting Started

The Usand 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 provisions require a firm to buy all of a particular item from a single firm?

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

Resale price maintenance can be illegal

What is meant by the term "exclusive dealing"? Give an example of an exclusive deal.When is it illegal?

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be ________ and if the firms act as competitors the price will be ________.

Game theory reveals that

One of the main tools economists use to analyze strategic behavior is

When an oligopoly reduces its price with the intent of driving away its competitors,it is said to be engaging in

Which of the following does antitrust law prohibit if it substantially lessens competition or creates a monopoly? i.acquiring a competitor's shares or assets ii.territorial confinement iii.becoming a director of a competing firm

A cartel is most likely to occur in

If a firm engages in predatory pricing,it

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.

The U.S.courts found Microsoft

What three characteristics do all games have in common?

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

All games have which features?

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit ________ and the first firm's profit ________.

"If an industry's Herfindahl-Hirschman Index is below 1,000,a merger between any two firms in that industry will be disallowed." Comment on the accuracy of the previous statement.

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

Getting Started

The Usand 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 figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be and if the firms act as competitors the price will be .

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit and the first firm's profit .