Question 1

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 2

In the prisoners' dilemma,each player is ________ regardless of the other player's actions.

Accepted Answer

A)  forced to confess 
B)  forced to deny 
C)  better off confessing 
D)  better off denying 
E)  going to go free 
A)  forced to confess 
B)  forced to deny 
C)  better off confessing 
D)  better off denying 
E)  going to go free

Question 3

If the Herfindahl-Hirschman Index (HHI)for a market is between 1,000 and 1,800,the Federal Trade Commission will examine

Accepted Answer

A)  all mergers. 
B)  no mergers. 
C)  mergers that raise the HHI by 100 or more points. 
D)  mergers that raise the HHI by 100 or fewer point. 
E)  mergers that lower the HHI by 100 or more points. 
A)  all mergers. 
B)  no mergers. 
C)  mergers that raise the HHI by 100 or more points. 
D)  mergers that raise the HHI by 100 or fewer point. 
E)  mergers that lower the HHI by 100 or more points.

Question 4

"If firms in an oligopoly operate as a monopoly,the industry produces the most output and if they operate as perfect competitors,the industry produces the least output." Is the previous statement correct or incorrect? Why?

Accepted Answer

The statement is incorrect; it reverses

Question 5

In an oligopoly,there are

Accepted Answer

A)  many firms and barriers to entry. 
B)  many firms and no barriers to entry. 
C)  few firms and barriers to entry. 
D)  few firms and no barriers to entry. 
E)  barriers to entry and only one firm. 
A)  many firms and barriers to entry. 
B)  many firms and no barriers to entry. 
C)  few firms and barriers to entry. 
D)  few firms and no barriers to entry. 
E)  barriers to entry and only one firm.

Question 6

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 7

Collusion results when a group of firms
i.act separately to limit output,lower prices,and decrease economic profits.
ii.act together to limit output,raise prices,and increase economic profits.
iii.in the United States legally fix prices.

Accepted Answer

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

Question 8

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 9

Oligopoly is a market structure in which

Accepted Answer

A)  many firms each produce a slightly differentiated product. 
B)  one firm produces a unique product. 
C)  a small number of firms compete. 
D)  many firms produce an identical product. 
E)  the number of firms is so small that they do not compete with each other. 
A)  many firms each produce a slightly differentiated product. 
B)  one firm produces a unique product. 
C)  a small number of firms compete. 
D)  many firms produce an identical product. 
E)  the number of firms is so small that they do not compete with each other.

Question 10

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where:

Accepted Answer

A)  P = MC. 
B)  MR = MC. 
C)  P < ATC. 
D)  P = MR. 
E)  MC = ATC. 
A)  P = MC. 
B)  MR = MC. 
C)  P < ATC. 
D)  P = MR. 
E)  MC = ATC.

Question 11

What are the merger rules used by the Federal Trade Commission to help decide whether firms are allowed to merge?

Accepted Answer

The Federal Trade Commission uses guidel

Question 12

-The table above has the market demand schedule in an industry that has two firms in it.The marginal cost of this product is zero because these two firms have exclusive ownership of the resource and it does not cost any additional amount to produce additional units.
a.If the firms cooperate with each other so that they operate as a monopoly,what price will they charge and what (total)output will they produce?
b.If the firms cannot cooperate but instead behave as perfect competitors,what will be the price and the (total)output they produce?

Accepted Answer

a.As a monopoly,the price will be $15 an

Question 13

If Polka Cola prevents all of its retail outlets from selling any other competing soft drink,it is engaged in

Accepted Answer

A)  a tying agreement. 
B)  a requirement contracts. 
C)  an exclusive deal. 
D)  territorial confinement. 
E)  resale price maintenance. 
A)  a tying agreement. 
B)  a requirement contracts. 
C)  an exclusive deal. 
D)  territorial confinement. 
E)  resale price maintenance.

Question 14

Setting a price so low that competitors are driven out of a market and then boosting the price is called

Accepted Answer

A)  predatory pricing. 
B)  a tying arrangement. 
C)  resale price maintenance. 
D)  price fixing. 
E)  price discrimination. 
A)  predatory pricing. 
B)  a tying arrangement. 
C)  resale price maintenance. 
D)  price fixing. 
E)  price discrimination.

Question 15

If a legal oligopoly exists,

Accepted Answer

A)  the firms always engage in a "tit for tat" strategy. 
B)  there is the possibility that the market is large enough for more firms. 
C)  the firms never collude. 
D)  monopoly profits cannot be earned. 
E)  the firms may legally merge and become a monopoly. 
A)  the firms always engage in a "tit for tat" strategy. 
B)  there is the possibility that the market is large enough for more firms. 
C)  the firms never collude. 
D)  monopoly profits cannot be earned. 
E)  the firms may legally merge and become a monopoly.

Question 16

The government believes that which entry barrier has allowed Microsoft to gain monopoly power?

Accepted Answer

A)  ownership of the entire supply of a resource 
B)  patents 
C)  trademarks 
D)  economies of scale and network economies 
E)  territorial confinement 
A)  ownership of the entire supply of a resource 
B)  patents 
C)  trademarks 
D)  economies of scale and network economies 
E)  territorial confinement

Question 17

A cartel is

Accepted Answer

A)  a group of firms selling identical products but at slightly different prices. 
B)  an agreement among firms to limit output, raise prices, and increase economic profit. 
C)  the automobile producing industry. 
D)  the only firm selling a particular product. 
E)  an illegal agreement among firms which most often arises in monopolistically competitive markets. 
A)  a group of firms selling identical products but at slightly different prices. 
B)  an agreement among firms to limit output, raise prices, and increase economic profit. 
C)  the automobile producing industry. 
D)  the only firm selling a particular product. 
E)  an illegal agreement among firms which most often arises in monopolistically competitive markets.

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

What are the actions that are prohibited according to the Clayton Act and its amendments.What conditions must be met for these actions to be prohibited?

Accepted Answer

The Clayton Act prohibits certain practi

Question 20

-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

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

In the prisoners' dilemma,each player is ________ regardless of the other player's actions.

If the Herfindahl-Hirschman Index (HHI)for a market is between 1,000 and 1,800,the Federal Trade Commission will examine

"If firms in an oligopoly operate as a monopoly,the industry produces the most output and if they operate as perfect competitors,the industry produces the least output." Is the previous statement correct or incorrect? Why?

In an oligopoly,there are

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?

Collusion results when a group of firms i.act separately to limit output,lower prices,and decrease economic profits. ii.act together to limit output,raise prices,and increase economic profits. iii.in the United States legally fix prices.

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

Oligopoly is a market structure in which

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where:

What are the merger rules used by the Federal Trade Commission to help decide whether firms are allowed to merge?

If Polka Cola prevents all of its retail outlets from selling any other competing soft drink,it is engaged in

Setting a price so low that competitors are driven out of a market and then boosting the price is called

If a legal oligopoly exists,

The government believes that which entry barrier has allowed Microsoft to gain monopoly power?

A cartel is

What are the actions that are prohibited according to the Clayton Act and its amendments.What conditions must be met for these actions to be prohibited?

-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.

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

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

In the prisoners' dilemma,each player is ________ regardless of the other player's actions.

If the Herfindahl-Hirschman Index (HHI)for a market is between 1,000 and 1,800,the Federal Trade Commission will examine

"If firms in an oligopoly operate as a monopoly,the industry produces the most output and if they operate as perfect competitors,the industry produces the least output." Is the previous statement correct or incorrect? Why?

In an oligopoly,there are

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?

Collusion results when a group of firms i.act separately to limit output,lower prices,and decrease economic profits. ii.act together to limit output,raise prices,and increase economic profits. iii.in the United States legally fix prices.

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

Oligopoly is a market structure in which

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where:

What are the merger rules used by the Federal Trade Commission to help decide whether firms are allowed to merge?

If Polka Cola prevents all of its retail outlets from selling any other competing soft drink,it is engaged in

Setting a price so low that competitors are driven out of a market and then boosting the price is called

If a legal oligopoly exists,

The government believes that which entry barrier has allowed Microsoft to gain monopoly power?

A cartel is

What are the actions that are prohibited according to the Clayton Act and its amendments.What conditions must be met for these actions to be prohibited?

-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.

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