Question 1

Tacit collusion among firms does not involve explicit agreements on pricing and output levels.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following must be true in an oligopoly?

Accepted Answer

A) The firms produce a differentiated product. 
B) There is one dominant firm in the market. 
C) The firms are strategically interacting. 
D) The market is international in scope. 
E) There are no significant barriers to entry. 
A) The firms produce a differentiated product. 
B) There is one dominant firm in the market. 
C) The firms are strategically interacting. 
D) The market is international in scope. 
E) There are no significant barriers to entry.

Question 3

The demand curve faced by a monopolistically competitive firm

Accepted Answer

A) is the same as the market demand curve 
B) is less elastic than the one faced by firms in perfect competition 
C) is perfectly elastic 
D) is perfectly inelastic 
E) has a constant slope 
A) is the same as the market demand curve 
B) is less elastic than the one faced by firms in perfect competition 
C) is perfectly elastic 
D) is perfectly inelastic 
E) has a constant slope

Question 4

New technologies may reduce oligopoly power by

Accepted Answer

A) increasing the minimum efficient scale 
B) raising barriers to entry 
C) raising prices and lowering output 
D) reducing barriers to entry 
E) reducing the choices available to consumers in the market 
A) increasing the minimum efficient scale 
B) raising barriers to entry 
C) raising prices and lowering output 
D) reducing barriers to entry 
E) reducing the choices available to consumers in the market

Question 5

A market with more than one seller and significant barriers to entry is called

Accepted Answer

A) perfect competition 
B) monopolistic competition 
C) an oligopoly 
D) collusive 
E) regulated 
A) perfect competition 
B) monopolistic competition 
C) an oligopoly 
D) collusive 
E) regulated

Question 6

In which market structure do firms consider the actions of their rivals when setting prices and output?

Accepted Answer

A) monopoly 
B) oligopoly 
C) perfect competition 
D) both monopoly and perfect competition 
E) monopolistic competition 
A) monopoly 
B) oligopoly 
C) perfect competition 
D) both monopoly and perfect competition 
E) monopolistic competition

Question 7

If market structures are ranked from the one in which firm(s)face the flattest demand curve to the one where they face the steepest,the correct order is

Accepted Answer

A) monopoly,monopolistic competition,perfect competition 
B) monopolistic competition,perfect competition,monopoly 
C) monopolistic competition,monopoly,perfect competition 
D) perfect competition,monopoly,monopolistic competition 
E) perfect competition,monopolistic competition,monopoly 
A) monopoly,monopolistic competition,perfect competition 
B) monopolistic competition,perfect competition,monopoly 
C) monopolistic competition,monopoly,perfect competition 
D) perfect competition,monopoly,monopolistic competition 
E) perfect competition,monopolistic competition,monopoly

Question 8

-Brian and Matt own the only two bicycle repair shops in town.Each must choose between a low price for repair work and a high price.The yearly economic profits from each strategy are indicated in Figure 11-12.The upper right side of each rectangle shows Brian's profits;the lower left side shows Matt's profits.Which of the following statements is correct?

Accepted Answer

A) Matt's dominant strategy is to charge a low price. 
B) Brian's dominant strategy is to charge a high price. 
C) The dominant strategy for both Brian and Matt is to charge a low price. 
D) Matt's dominant strategy is to charge a high price. 
E) Neither Brian nor Matt has a dominant strategy. 
A) Matt's dominant strategy is to charge a low price. 
B) Brian's dominant strategy is to charge a high price. 
C) The dominant strategy for both Brian and Matt is to charge a low price. 
D) Matt's dominant strategy is to charge a high price. 
E) Neither Brian nor Matt has a dominant strategy.

Question 9

The key characteristic of oligopoly is

Accepted Answer

A) that firms are price takers 
B) strategic interaction among firms 
C) strategic independence among firms 
D) that firms deal with few resource suppliers 
E) a low minimum efficient scale of production 
A) that firms are price takers 
B) strategic interaction among firms 
C) strategic independence among firms 
D) that firms deal with few resource suppliers 
E) a low minimum efficient scale of production

Question 10

All of the following,except one,are characteristics of monopolistic competition.Which is the exception?

Accepted Answer

A) There is a large number of sellers. 
B) Each seller faces a horizontal demand curve for its product. 
C) There are no significant barriers to entry or exit. 
D) Sellers produce differentiated products. 
E) There is a large number of buyers. 
A) There is a large number of sellers. 
B) Each seller faces a horizontal demand curve for its product. 
C) There are no significant barriers to entry or exit. 
D) Sellers produce differentiated products. 
E) There is a large number of buyers.

Question 11

A strategy that is best for a player regardless of the strategy of the other player is called a(n)

Accepted Answer

A) subsistence strategy 
B) determinant strategy 
C) dominant strategy 
D) independent strategy 
E) autonomous strategy 
A) subsistence strategy 
B) determinant strategy 
C) dominant strategy 
D) independent strategy 
E) autonomous strategy

Question 12

If a market is dominated by a few large,interdependent firms,it is said to be a(n)

Accepted Answer

A) oligopoly 
B) monopoly 
C) integrated monopoly 
D) monopolistically competitive market 
E) perfectly competitive market 
A) oligopoly 
B) monopoly 
C) integrated monopoly 
D) monopolistically competitive market 
E) perfectly competitive market

Question 13

Cheating on a collusive agreement is more likely when

Accepted Answer

A) a price floor is in effect 
B) firms are located in the same state 
C) it is easy to observe the other firms' prices 
D) there is a small number of firms 
E) market demand is unstable 
A) a price floor is in effect 
B) firms are located in the same state 
C) it is easy to observe the other firms' prices 
D) there is a small number of firms 
E) market demand is unstable

Question 14

When there are many buyers and sellers,no significant barriers to entry,and a differentiated product,the market structure is called

Accepted Answer

A) an oligopoly 
B) perfect competition 
C) monopolistic competition 
D) a monopoly 
E) unbalanced monopoly 
A) an oligopoly 
B) perfect competition 
C) monopolistic competition 
D) a monopoly 
E) unbalanced monopoly

Question 15

-The profit-maximizing price for the firm in Figure 11-3 is

Accepted Answer

A) $165 
B) $150 
C) less than $150,but more than $100 
D) irrelevant because the firm should shut down immediately 
E) less than $100 
A) $165 
B) $150 
C) less than $150,but more than $100 
D) irrelevant because the firm should shut down immediately 
E) less than $100

Question 16

Oligopolistic firms are the only ones that do not consider their rivals' actions when making decisions about output and price.

Accepted Answer

A) True 
 B)False

Question 17

Antitrust policies usually focus on encouraging cost-efficient mergers between firms in the same industry.

Accepted Answer

A) True 
 B)False

Question 18

-If the firm represented in Figure 11-7 is typical of other firms in the industry,then,as the long run approaches,

Accepted Answer

A) some firms will exit,and the demand curves facing the remaining firms will shift to the left 
B) some firms will exit,and the demand curves facing the remaining firms will shift to the right 
C) some firms will enter,and the demand curves facing the remaining firms will shift to the left 
D) some firms will enter,and the demand curves facing the remaining firms will shift to the right 
E) the industry will eventually disappear 
A) some firms will exit,and the demand curves facing the remaining firms will shift to the left 
B) some firms will exit,and the demand curves facing the remaining firms will shift to the right 
C) some firms will enter,and the demand curves facing the remaining firms will shift to the left 
D) some firms will enter,and the demand curves facing the remaining firms will shift to the right 
E) the industry will eventually disappear

Question 19

We may not be able to predict the outcome of a two-player game when

Accepted Answer

A) each player follows a strategy that negates the strategy of the other player 
B) price exceeds marginal cost 
C) neither player has a subsistence strategy 
D) neither player has a dominant strategy 
E) at least one player has a bilateral strategy 
A) each player follows a strategy that negates the strategy of the other player 
B) price exceeds marginal cost 
C) neither player has a subsistence strategy 
D) neither player has a dominant strategy 
E) at least one player has a bilateral strategy

Question 20

A firm's minimum efficient scale occurs where the long-run average total cost curve reaches its minimum.

Accepted Answer

A) True 
 B)False

Tacit collusion among firms does not involve explicit agreements on pricing and output levels.

Which of the following must be true in an oligopoly?

The demand curve faced by a monopolistically competitive firm

New technologies may reduce oligopoly power by

A market with more than one seller and significant barriers to entry is called

In which market structure do firms consider the actions of their rivals when setting prices and output?

If market structures are ranked from the one in which firm(s)face the flattest demand curve to the one where they face the steepest,the correct order is

The key characteristic of oligopoly is

All of the following,except one,are characteristics of monopolistic competition.Which is the exception?

A strategy that is best for a player regardless of the strategy of the other player is called a(n)

If a market is dominated by a few large,interdependent firms,it is said to be a(n)

Cheating on a collusive agreement is more likely when

When there are many buyers and sellers,no significant barriers to entry,and a differentiated product,the market structure is called

-The profit-maximizing price for the firm in Figure 11-3 is

Oligopolistic firms are the only ones that do not consider their rivals' actions when making decisions about output and price.

Antitrust policies usually focus on encouraging cost-efficient mergers between firms in the same industry.

-If the firm represented in Figure 11-7 is typical of other firms in the industry,then,as the long run approaches,

We may not be able to predict the outcome of a two-player game when

A firm's minimum efficient scale occurs where the long-run average total cost curve reaches its minimum.

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 11: Monopolistic Competition and Oligopoly

Tacit collusion among firms does not involve explicit agreements on pricing and output levels.

Which of the following must be true in an oligopoly?

The demand curve faced by a monopolistically competitive firm

New technologies may reduce oligopoly power by

A market with more than one seller and significant barriers to entry is called

In which market structure do firms consider the actions of their rivals when setting prices and output?

If market structures are ranked from the one in which firm(s)face the flattest demand curve to the one where they face the steepest,the correct order is

The key characteristic of oligopoly is

All of the following,except one,are characteristics of monopolistic competition.Which is the exception?

A strategy that is best for a player regardless of the strategy of the other player is called a(n)

If a market is dominated by a few large,interdependent firms,it is said to be a(n)

Cheating on a collusive agreement is more likely when

When there are many buyers and sellers,no significant barriers to entry,and a differentiated product,the market structure is called

-The profit-maximizing price for the firm in Figure 11-3 is

Oligopolistic firms are the only ones that do not consider their rivals' actions when making decisions about output and price.

Antitrust policies usually focus on encouraging cost-efficient mergers between firms in the same industry.

-If the firm represented in Figure 11-7 is typical of other firms in the industry,then,as the long run approaches,

We may not be able to predict the outcome of a two-player game when

A firm's minimum efficient scale occurs where the long-run average total cost curve reaches its minimum.

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters