Question 1

In a Nash equilibrium

Accepted Answer

A) any player can improve his outcome by changing one other player's strategy 
B) any player can improve his outcome by forcing other players to adopt their dominant strategies 
C) no player plays her dominant strategy 
D) no player can improve his own outcome 
E) no player can improve his outcome by changing only his own strategy 
A) any player can improve his outcome by changing one other player's strategy 
B) any player can improve his outcome by forcing other players to adopt their dominant strategies 
C) no player plays her dominant strategy 
D) no player can improve his own outcome 
E) no player can improve his outcome by changing only his own strategy

Question 2

After much success during the 1970s,the OPEC cartel saw the price of oil and the revenues of its members decline during the 1980s due,in part,to

Accepted Answer

A) the low elasticity of demand for oil in the short run 
B) the large number of buyers from each member nation 
C) surging demand for oil in the early 1980s 
D) publicity concerning the prices negotiated with each member 
E) the greater long-run elasticity of demand for oil 
A) the low elasticity of demand for oil in the short run 
B) the large number of buyers from each member nation 
C) surging demand for oil in the early 1980s 
D) publicity concerning the prices negotiated with each member 
E) the greater long-run elasticity of demand for oil

Question 3

In the prisoner's dilemma,

Accepted Answer

A) the prisoners easily collude in order to achieve the best possible payoff for both 
B) only one player has a dominant strategy 
C) each player has a dominant strategy 
D) playing the dominant strategy leads to a better payoff for one prisoner than if the two jointly selected a strategy 
E) playing the dominant strategy leads to a better payoff for both prisoners than if the two jointly selected a strategy 
A) the prisoners easily collude in order to achieve the best possible payoff for both 
B) only one player has a dominant strategy 
C) each player has a dominant strategy 
D) playing the dominant strategy leads to a better payoff for one prisoner than if the two jointly selected a strategy 
E) playing the dominant strategy leads to a better payoff for both prisoners than if the two jointly selected a strategy

Question 4

-The firm in Figure 11-2 is monopolistically competitive.The diagram illustrates a

Accepted Answer

A) shut-down case 
B) long-run economic loss 
C) short-run economic loss 
D) long-run economic profit 
E) short-run economic profit 
A) shut-down case 
B) long-run economic loss 
C) short-run economic loss 
D) long-run economic profit 
E) short-run economic profit

Question 5

Consider an industry with 5 firms.Firm A has sales of $6 mil. ,firm B has sales of $12 mil. ,firm C has sales of $30 mil. ,firm D has sales of $50 mil.and firm E has sales of $2 mil.The Herfindahl-Hirschman index for this industry is

Accepted Answer

A) 3580 
B) 3584 
C) 2500 
D) 3400 
E) unknown,not enough information to tell 
A) 3580 
B) 3584 
C) 2500 
D) 3400 
E) unknown,not enough information to tell

Question 6

With economies of scale,a firm can continue to lower its cost per unit by increasing output

Accepted Answer

A) without limit 
B) up to the minimum efficient scale 
C) until the firm is meeting market demand single-handedly 
D) to some point between the minimum efficient scale and the market demand curve 
E) halfway to the minimum efficient scale 
A) without limit 
B) up to the minimum efficient scale 
C) until the firm is meeting market demand single-handedly 
D) to some point between the minimum efficient scale and the market demand curve 
E) halfway to the minimum efficient scale

Question 7

Oligopoly

Accepted Answer

A) is a market structure of many small firms 
B) is the only seller of a good or service 
C) is a market structure of a few consumers of a product 
D) is a market structure of a few interdependent firms 
E) is a more efficient market structure than perfect competition 
A) is a market structure of many small firms 
B) is the only seller of a good or service 
C) is a market structure of a few consumers of a product 
D) is a market structure of a few interdependent firms 
E) is a more efficient market structure than perfect competition

Question 8

In the long run,a monopolistically competitive firm will produce too little output to minimize average cost.Therefore,it will have

Accepted Answer

A) positive economic profit 
B) negative economic profit 
C) excess profit 
D) X-inefficiency 
E) excess capacity 
A) positive economic profit 
B) negative economic profit 
C) excess profit 
D) X-inefficiency 
E) excess capacity

Question 9

If a market is not subject to large,frequent shifts in demand,

Accepted Answer

A) firms will have a tendency to lower prices to increase market share 
B) the market will have few firms 
C) prices will approach equilibrium very slowly 
D) price leadership will rarely occur 
E) cheating on collusive agreements is more difficult 
A) firms will have a tendency to lower prices to increase market share 
B) the market will have few firms 
C) prices will approach equilibrium very slowly 
D) price leadership will rarely occur 
E) cheating on collusive agreements is more difficult

Question 10

In addition to shifting its demand curve to the right,a firm may engage in advertising in order to

Accepted Answer

A) make its demand curve more elastic 
B) increase the elasticity of its supply curve 
C) discourage competition 
D) make its demand curve less elastic 
E) decrease consumer awareness 
A) make its demand curve more elastic 
B) increase the elasticity of its supply curve 
C) discourage competition 
D) make its demand curve less elastic 
E) decrease consumer awareness

Question 11

Oligopolistic firms are the only ones that consider their rivals' actions when making decisions about output and price.

Accepted Answer

A) True 
 B)False

Question 12

If there are a large number of sellers in a market,

Accepted Answer

A) it is difficult for firms to cheat on a collusive agreement 
B) a cartel is unlikely to break down 
C) prices are higher than in smaller markets 
D) a cartel is likely to break down 
E) perfect competition occurs in the long run 
A) it is difficult for firms to cheat on a collusive agreement 
B) a cartel is unlikely to break down 
C) prices are higher than in smaller markets 
D) a cartel is likely to break down 
E) perfect competition occurs in the long run

Question 13

In the short run,a monopolistic competitor can

Accepted Answer

A) not earn an economic profit because of competition 
B) use limit pricing to reduce competition 
C) maximize profits by charging the highest price the market will bear 
D) earn an economic profit 
E) maximize profit by selecting the minimum efficient scale 
A) not earn an economic profit because of competition 
B) use limit pricing to reduce competition 
C) maximize profits by charging the highest price the market will bear 
D) earn an economic profit 
E) maximize profit by selecting the minimum efficient scale

Question 14

Which of the following might be an effect of advertising?

Accepted Answer

A) all of the following 
B) increased product differentiation 
C) increased total costs of production 
D) increased average total costs of production 
E) increased demand for the product 
A) all of the following 
B) increased product differentiation 
C) increased total costs of production 
D) increased average total costs of production 
E) increased demand for the product

Question 15

Firms in a monopolistically competitive industry maximize profits by

Accepted Answer

A) equating total revenue and total cost 
B) treating price as given and maximizing output 
C) minimizing costs 
D) producing the level of output at which MR = MC 
E) producing the level of output at which TR = TC 
A) equating total revenue and total cost 
B) treating price as given and maximizing output 
C) minimizing costs 
D) producing the level of output at which MR = MC 
E) producing the level of output at which TR = TC

Question 16

-If the monopolistically competitive firm in Figure 11-8 is typical of its competitors,the industry will likely experience

Accepted Answer

A) increasing returns to scale 
B) entry of new firms 
C) exit of existing firms 
D) no change in the long run 
E) exit of all firms 
A) increasing returns to scale 
B) entry of new firms 
C) exit of existing firms 
D) no change in the long run 
E) exit of all firms

Question 17

In game theory a listing of the rewards or punishments that each player will receive for each possible combination of strategies is called

Accepted Answer

A) the marginal strategy schedule 
B) the payoff matrix 
C) strategic planning 
D) the input-output matrix 
E) the game listing payoff 
A) the marginal strategy schedule 
B) the payoff matrix 
C) strategic planning 
D) the input-output matrix 
E) the game listing payoff

Question 18

U.S.antitrust enforcement policies have focused on

Accepted Answer

A) encouraging price-fixing agreements to stabilize market prices 
B) limiting the activities of large firms when consumers are being harmed 
C) removing management from firms whose economic profits are excessive 
D) encouraging mergers in selected markets 
E) limiting output levels of firms in competitive markets 
A) encouraging price-fixing agreements to stabilize market prices 
B) limiting the activities of large firms when consumers are being harmed 
C) removing management from firms whose economic profits are excessive 
D) encouraging mergers in selected markets 
E) limiting output levels of firms in competitive markets

Question 19

In monopolistic competition,product differentiation causes

Accepted Answer

A) the firms to earn economic profits in the long run 
B) a horizontal demand curve for each firm's output 
C) the firms to operate with excess capacity 
D) significant barriers to entry 
E) high concentration ratios 
A) the firms to earn economic profits in the long run 
B) a horizontal demand curve for each firm's output 
C) the firms to operate with excess capacity 
D) significant barriers to entry 
E) high concentration ratios

Question 20

If a market has more than one seller,but fewer sellers than under perfect competition,it is referred to as

Accepted Answer

A) a monopoly 
B) competitive 
C) imperfect competition 
D) an efficient market 
E) optimal 
A) a monopoly 
B) competitive 
C) imperfect competition 
D) an efficient market 
E) optimal

In a Nash equilibrium

After much success during the 1970s,the OPEC cartel saw the price of oil and the revenues of its members decline during the 1980s due,in part,to

In the prisoner's dilemma,

-The firm in Figure 11-2 is monopolistically competitive.The diagram illustrates a

Consider an industry with 5 firms.Firm A has sales of $6 mil. ,firm B has sales of $12 mil. ,firm C has sales of $30 mil. ,firm D has sales of $50 mil.and firm E has sales of $2 mil.The Herfindahl-Hirschman index for this industry is

With economies of scale,a firm can continue to lower its cost per unit by increasing output

Oligopoly

In the long run,a monopolistically competitive firm will produce too little output to minimize average cost.Therefore,it will have

If a market is not subject to large,frequent shifts in demand,

In addition to shifting its demand curve to the right,a firm may engage in advertising in order to

Oligopolistic firms are the only ones that consider their rivals' actions when making decisions about output and price.

If there are a large number of sellers in a market,

In the short run,a monopolistic competitor can

Which of the following might be an effect of advertising?

Firms in a monopolistically competitive industry maximize profits by

-If the monopolistically competitive firm in Figure 11-8 is typical of its competitors,the industry will likely experience

In game theory a listing of the rewards or punishments that each player will receive for each possible combination of strategies is called

U.S.antitrust enforcement policies have focused on

In monopolistic competition,product differentiation causes

If a market has more than one seller,but fewer sellers than under perfect competition,it is referred to as

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

In a Nash equilibrium

After much success during the 1970s,the OPEC cartel saw the price of oil and the revenues of its members decline during the 1980s due,in part,to

In the prisoner's dilemma,

-The firm in Figure 11-2 is monopolistically competitive.The diagram illustrates a

Consider an industry with 5 firms.Firm A has sales of $6 mil. ,firm B has sales of $12 mil. ,firm C has sales of $30 mil. ,firm D has sales of $50 mil.and firm E has sales of $2 mil.The Herfindahl-Hirschman index for this industry is

With economies of scale,a firm can continue to lower its cost per unit by increasing output

Oligopoly

In the long run,a monopolistically competitive firm will produce too little output to minimize average cost.Therefore,it will have

If a market is not subject to large,frequent shifts in demand,

In addition to shifting its demand curve to the right,a firm may engage in advertising in order to

Oligopolistic firms are the only ones that consider their rivals' actions when making decisions about output and price.

If there are a large number of sellers in a market,

In the short run,a monopolistic competitor can

Which of the following might be an effect of advertising?

Firms in a monopolistically competitive industry maximize profits by

-If the monopolistically competitive firm in Figure 11-8 is typical of its competitors,the industry will likely experience

In game theory a listing of the rewards or punishments that each player will receive for each possible combination of strategies is called

U.S.antitrust enforcement policies have focused on

In monopolistic competition,product differentiation causes

If a market has more than one seller,but fewer sellers than under perfect competition,it is referred to as

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