Question 1

Explain how the courts have ruled on price fixing.

Accepted Answer

Price fixing is always a violation of th

Question 2

-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 3

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 4

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 5

In a concentrated industry with a Herfindahl-Hirschman Index that exceeds 1,800,the Federal Trade Commission will challenge any merger that increases the Herfindahl-Hirschman index by a minimum of

Accepted Answer

A)  50 points. 
B)  100 points. 
C)  1,000 points. 
D)  1,800 points. 
E)  10,000 points. 
A)  50 points. 
B)  100 points. 
C)  1,000 points. 
D)  1,800 points. 
E)  10,000 points.

Question 6

Two firms are competing in a duopoly and are trying to decide which price to set.The two prices under consideration are a high monopoly price and a low competitive level.If both seller A and seller B chose the monopoly price,each will make $20 million of economic profit.However,if one picks the monopoly price while the other picks the competitive price,the high-price firm will lose $1 million while the low-price firm will make $32 million.If both sell at the competitive level,they both make zero economic profit.Complete the payoff matrix below and determine the Nash equilibrium.

Accepted Answer

@#IMG-DLM& The completed payoff matrix i

Question 7

Describe the Department of Justice's claims against Microsoft.

Accepted Answer

The Department of Justice claims that Mi

Question 8

Which antitrust law has two main provisions,one against conspiring with others to restrict competition and the other making it a felony to monopolize or attempt to monopolize?

Accepted Answer

A)  Sherman Act 
B)  Clayton Act 
C)  Robinson-Patman Act 
D)  Celler-Kefauver Act 
E)  Bade-Parkin Act 
A)  Sherman Act 
B)  Clayton Act 
C)  Robinson-Patman Act 
D)  Celler-Kefauver Act 
E)  Bade-Parkin Act

Question 9

In a prisoners' dilemma game,in the Nash equilibrium

Accepted Answer

A)  neither player gets his or her best outcome. 
B)  both players get their best outcome. 
C)  one player gets his or her best outcome and the other player does not. 
D)  collusion would not alter the outcome. 
E)  Either answer A or C might be correct depending on whether the players communicate with each other or do not communicate with each other. 
A)  neither player gets his or her best outcome. 
B)  both players get their best outcome. 
C)  one player gets his or her best outcome and the other player does not. 
D)  collusion would not alter the outcome. 
E)  Either answer A or C might be correct depending on whether the players communicate with each other or do not communicate with each other.

Question 10

The very best joint outcome possible for the firms in a duopoly is to produce the

Accepted Answer

A)  monopoly level of output. 
B)  perfectly competitive level of output. 
C)  amount of output that maximizes total revenue. 
D)  amount of output that minimizes total cost. 
E)  Nash equilibrium level of output if the game is not repeated. 
A)  monopoly level of output. 
B)  perfectly competitive level of output. 
C)  amount of output that maximizes total revenue. 
D)  amount of output that minimizes total cost. 
E)  Nash equilibrium level of output if the game is not repeated.

Question 11

Section 1 of the Sherman Antitrust Act declares what to be illegal?

Accepted Answer

A)  every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations 
B)  mergers of a horizontal nature 
C)  any attempt to monopolize an industry 
D)  sharing of technology among competing firms or mergers where the effect is to lessen competition 
E)  exiting an industry if the remaining firm or firms have a market share that is too large. 
A)  every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations 
B)  mergers of a horizontal nature 
C)  any attempt to monopolize an industry 
D)  sharing of technology among competing firms or mergers where the effect is to lessen competition 
E)  exiting an industry if the remaining firm or firms have a market share that is too large.

Question 12

-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)  6,000 
E)  10,000 
A)  2,000 
B)  4,000 
C)  8,000 
D)  6,000 
E)  10,000

Question 13

A Nash equilibrium in the duopoly game

Accepted Answer

A)  means that one player has greater market power. 
B)  occurs when each player takes the best possible action regardless of the strategy chosen by other firms. 
C)  will always lead to equilibrium in which the firms' total profit is the largest. 
D)  can occur only if firms cooperate with each other. 
E)  means that a firm must be able to determine its actions and the actions of its competitor. 
A)  means that one player has greater market power. 
B)  occurs when each player takes the best possible action regardless of the strategy chosen by other firms. 
C)  will always lead to equilibrium in which the firms' total profit is the largest. 
D)  can occur only if firms cooperate with each other. 
E)  means that a firm must be able to determine its actions and the actions of its competitor.

Question 14

A firm faces a small number of competitors.This firm is competing in

Accepted Answer

A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  a perfect multi-firm monopoly. 
A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  a perfect multi-firm monopoly.

Question 15

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone ________ its price and ________ its production.

Accepted Answer

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

Question 16

A Nash equilibrium occurs

Accepted Answer

A)  when each player acts without considering the actions of the other player. 
B)  when each player takes the best possible action given the action of the other player. 
C)  only when players use the tit-for-tat strategy. 
D)  only when the game is played in Nashville, TN. 
E)  when each player takes the action that makes the combined payoff for all players as large as possible. 
A)  when each player acts without considering the actions of the other player. 
B)  when each player takes the best possible action given the action of the other player. 
C)  only when players use the tit-for-tat strategy. 
D)  only when the game is played in Nashville, TN. 
E)  when each player takes the action that makes the combined payoff for all players as large as possible.

Question 17

The Clayton Act

Accepted Answer

A)  replaced the Sherman Act. 
B)  along with its amendments, outlawed several business practices if they substantially lessened competition or created monopoly. 
C)  along with its amendments, prohibited all business practices that substantially lessen competition or create monopoly. 
D)  was the first anti-trust law in the United States. 
E)  was repealed in 1985. 
A)  replaced the Sherman Act. 
B)  along with its amendments, outlawed several business practices if they substantially lessened competition or created monopoly. 
C)  along with its amendments, prohibited all business practices that substantially lessen competition or create monopoly. 
D)  was the first anti-trust law in the United States. 
E)  was repealed in 1985.

Question 18

Which of the following is always illegal?

Accepted Answer

A)  possessing a very large market share 
B)  selling at a price below other producers because of efficiency 
C)  price fixing 
D)  attempting to merge with a competitor 
E)  price discrimination 
A)  possessing a very large market share 
B)  selling at a price below other producers because of efficiency 
C)  price fixing 
D)  attempting to merge with a competitor 
E)  price discrimination

Question 19

Price fixing

Accepted Answer

A)  always is a violation of the law. 
B)  is allowed only if otherwise a firm would go bankrupt. 
C)  is one of the business practices prohibited by the Clayton Act. 
D)  is a violation of the law only when it is combined with predatory pricing. 
E)  is legal if the businesses have received prior clearance from the Justice Department. 
A)  always is a violation of the law. 
B)  is allowed only if otherwise a firm would go bankrupt. 
C)  is one of the business practices prohibited by the Clayton Act. 
D)  is a violation of the law only when it is combined with predatory pricing. 
E)  is legal if the businesses have received prior clearance from the Justice Department.

Question 20

Game theory is the tool that economists use to analyze strategic behavior,which is behavior that takes into account the ________ behavior of others and the mutual recognition of ________.

Accepted Answer

A)  unexpected; interdependence 
B)  unexpected; independence 
C)  expected; interdependence 
D)  expected; independence 
E)  random; profit 
A)  unexpected; interdependence 
B)  unexpected; independence 
C)  expected; interdependence 
D)  expected; independence 
E)  random; profit

Explain how the courts have ruled on price fixing.

The fact that firms in oligopoly are interdependent means that

Oligopoly is

In a concentrated industry with a Herfindahl-Hirschman Index that exceeds 1,800,the Federal Trade Commission will challenge any merger that increases the Herfindahl-Hirschman index by a minimum of

Describe the Department of Justice's claims against Microsoft.

Which antitrust law has two main provisions,one against conspiring with others to restrict competition and the other making it a felony to monopolize or attempt to monopolize?

In a prisoners' dilemma game,in the Nash equilibrium

The very best joint outcome possible for the firms in a duopoly is to produce the

Section 1 of the Sherman Antitrust Act declares what to be illegal?

-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.

A Nash equilibrium in the duopoly game

A firm faces a small number of competitors.This firm is competing in

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone its price and its production.

A Nash equilibrium occurs

The Clayton Act

Which of the following is always illegal?

Price fixing

Game theory is the tool that economists use to analyze strategic behavior,which is behavior that takes into account the behavior of others and the mutual recognition of .

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

Explain how the courts have ruled on price fixing.

The fact that firms in oligopoly are interdependent means that

Oligopoly is

In a concentrated industry with a Herfindahl-Hirschman Index that exceeds 1,800,the Federal Trade Commission will challenge any merger that increases the Herfindahl-Hirschman index by a minimum of

Describe the Department of Justice's claims against Microsoft.

Which antitrust law has two main provisions,one against conspiring with others to restrict competition and the other making it a felony to monopolize or attempt to monopolize?

In a prisoners' dilemma game,in the Nash equilibrium

The very best joint outcome possible for the firms in a duopoly is to produce the

Section 1 of the Sherman Antitrust Act declares what to be illegal?

-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.

A Nash equilibrium in the duopoly game

A firm faces a small number of competitors.This firm is competing in

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone ________ its price and ________ its production.

A Nash equilibrium occurs

The Clayton Act

Which of the following is always illegal?

Price fixing

Game theory is the tool that economists use to analyze strategic behavior,which is behavior that takes into account the ________ behavior of others and the mutual recognition of ________.

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

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone its price and its production.

Game theory is the tool that economists use to analyze strategic behavior,which is behavior that takes into account the behavior of others and the mutual recognition of .