Question 1

An oligopolistic industry in which one firm sets the price is

Accepted Answer

A) a cartel 
B) a duopoly 
C) a monopoly 
D) price leadership 
E) a price-discriminating duopolist 
A) a cartel 
B) a duopoly 
C) a monopoly 
D) price leadership 
E) a price-discriminating duopolist

Question 2

Regardless of whether advertising is effective or not,it results in an increase in both fixed and total costs.

Accepted Answer

A) True 
 B)False

Question 3

Technological changes that decrease minimum efficient scale

Accepted Answer

A) reduce concentration 
B) increase concentration 
C) increase product diversification 
D) increase the value of existing assets 
E) decrease the exchange rate 
A) reduce concentration 
B) increase concentration 
C) increase product diversification 
D) increase the value of existing assets 
E) decrease the exchange rate

Question 4

Which of the following would make cheating on a collusive agreement more likely?

Accepted Answer

A) greater ease of observing other firms' prices 
B) a reduction in the number of sellers in the market 
C) close monitoring by the Department of Justice 
D) more frequent shifts in market demand 
E) an increase in the number of customers in the market 
A) greater ease of observing other firms' prices 
B) a reduction in the number of sellers in the market 
C) close monitoring by the Department of Justice 
D) more frequent shifts in market demand 
E) an increase in the number of customers in the market

Question 5

Of the following markets,which is most likely to be monopolistically competitive?

Accepted Answer

A) automobiles 
B) corn 
C) overnight package delivery 
D) air travel between a small city and a larger one 
E) fast food 
A) automobiles 
B) corn 
C) overnight package delivery 
D) air travel between a small city and a larger one 
E) fast food

Question 6

When the oil-producing countries of the Middle East meet to set prices and output levels,this is an example of

Accepted Answer

A) monopoly behavior 
B) profit sharing 
C) market distribution 
D) explicit collusion 
E) tacit collusion 
A) monopoly behavior 
B) profit sharing 
C) market distribution 
D) explicit collusion 
E) tacit collusion

Question 7

Which of the following types of markets would be the most likely to maintain a successful collusive agreement?

Accepted Answer

A) a market with many sellers,many buyers,unstable market demand,and privately negotiated prices 
B) a market with few sellers,many buyers,stable market demand,and privately negotiated prices 
C) a market with few sellers,many buyers,stable market demand,and publicized prices 
D) a market with many sellers,few buyers,stable market demand,and privately negotiated prices 
E) a market with few sellers,few buyers,unstable market demand,and publicized prices 
A) a market with many sellers,many buyers,unstable market demand,and privately negotiated prices 
B) a market with few sellers,many buyers,stable market demand,and privately negotiated prices 
C) a market with few sellers,many buyers,stable market demand,and publicized prices 
D) a market with many sellers,few buyers,stable market demand,and privately negotiated prices 
E) a market with few sellers,few buyers,unstable market demand,and publicized prices

Question 8

-Consider the monopolistically competitive firm whose demand curve and cost structure are illustrated in Figure 11-1.Which of the following statements is correct in the short run?

Accepted Answer

A) The firm will produce 100 units and suffer a loss of $400 per week. 
B) The firm will produce 100 units and suffer a loss of $300 per week. 
C) The firm will produce 100 units and suffer a loss of $1,000 per week. 
D) The firm will produce 100 units and suffer a loss of $100 per week. 
E) The firm will produce zero units and suffer a loss of $300 per week. 
A) The firm will produce 100 units and suffer a loss of $400 per week. 
B) The firm will produce 100 units and suffer a loss of $300 per week. 
C) The firm will produce 100 units and suffer a loss of $1,000 per week. 
D) The firm will produce 100 units and suffer a loss of $100 per week. 
E) The firm will produce zero units and suffer a loss of $300 per week.

Question 9

Antitrust policies attempt to protect consumers by

Accepted Answer

A) imposing criminal sanctions on firms with excessive economic profits 
B) ensuring that firms do not produce more than the socially desirable level of output 
C) making sure that there is a sufficient amount of competition in markets 
D) requiring all products to have an implied warranty 
E) disseminating rules and regulations for consumers to use in the marketplace 
A) imposing criminal sanctions on firms with excessive economic profits 
B) ensuring that firms do not produce more than the socially desirable level of output 
C) making sure that there is a sufficient amount of competition in markets 
D) requiring all products to have an implied warranty 
E) disseminating rules and regulations for consumers to use in the marketplace

Question 10

If one were to rank the demand curve facing a firm from the least elastic to the most elastic,the ranking would be

Accepted Answer

A) monopoly,perfectly competitive,monopolistically competitive 
B) monopoly,monopolistically competitive,perfectly competitive 
C) perfectly competitive,monopoly,monopolistically competitive 
D) monopolistically competitive,monopoly,perfectly competitive 
E) perfectly competitive,monopolistically competitive,monopoly 
A) monopoly,perfectly competitive,monopolistically competitive 
B) monopoly,monopolistically competitive,perfectly competitive 
C) perfectly competitive,monopoly,monopolistically competitive 
D) monopolistically competitive,monopoly,perfectly competitive 
E) perfectly competitive,monopolistically competitive,monopoly

Question 11

Which of the following has contributed to decreased concentration in U.S.industry since the 1970s?

Accepted Answer

A) rising interest rates and disinflation 
B) segmentation and economies of scale 
C) devaluation and economies of scale 
D) technological change and market globalization 
E) marginal cost pricing and product differentiation 
A) rising interest rates and disinflation 
B) segmentation and economies of scale 
C) devaluation and economies of scale 
D) technological change and market globalization 
E) marginal cost pricing and product differentiation

Question 12

If a firm earns zero economic profit in the long run,then it

Accepted Answer

A) must be in a perfectly competitive market 
B) must be in a monopolistically competitive market 
C) cannot be in a monopolistically competitive market 
D) could be in any of the four major market structures 
E) is not in an oligopoly 
A) must be in a perfectly competitive market 
B) must be in a monopolistically competitive market 
C) cannot be in a monopolistically competitive market 
D) could be in any of the four major market structures 
E) is not in an oligopoly

Question 13

Price leadership

Accepted Answer

A) is a form of explicit collusion 
B) works only when firms have dominant strategies 
C) is a form of tacit collusion 
D) reduces long-run economic profit for individual firms 
E) rarely is effective in setting prices in oligopolistic markets 
A) is a form of explicit collusion 
B) works only when firms have dominant strategies 
C) is a form of tacit collusion 
D) reduces long-run economic profit for individual firms 
E) rarely is effective in setting prices in oligopolistic markets

Question 14

Any action,other than lowering its price,that a firm undertakes to increase the demand for its output is called

Accepted Answer

A) limit pricing 
B) price enhancement 
C) illicit competition 
D) nonprice competition 
E) price intensive competition 
A) limit pricing 
B) price enhancement 
C) illicit competition 
D) nonprice competition 
E) price intensive competition

Question 15

The output level at which a firm's long-run average total cost is minimized is known as its

Accepted Answer

A) profit-maximizing output level 
B) long-run marginal cost 
C) minimum efficient scale 
D) revenue maximization level 
E) equilibrium cost structure 
A) profit-maximizing output level 
B) long-run marginal cost 
C) minimum efficient scale 
D) revenue maximization level 
E) equilibrium cost structure

Question 16

The demand curve for Apple iTune music downloads is unstable because

Accepted Answer

A) consumers of music downloads are irrational 
B) Apple's production costs are unstable 
C) it is unclear how Amazon,its primary competitor,will react to Apple's pricing strategy 
D) the market for music downloads is unpredictable 
E) consumers of music downloads have the option to download music for free 
A) consumers of music downloads are irrational 
B) Apple's production costs are unstable 
C) it is unclear how Amazon,its primary competitor,will react to Apple's pricing strategy 
D) the market for music downloads is unpredictable 
E) consumers of music downloads have the option to download music for free

Question 17

When colluding oligopolists meet and formally agree on mutually beneficial strategies this is called

Accepted Answer

A) implicit exclusion 
B) beneficial inclusion 
C) reciprocal inclusion 
D) implicit exclusionary pricing 
E) explicit collusion 
A) implicit exclusion 
B) beneficial inclusion 
C) reciprocal inclusion 
D) implicit exclusionary pricing 
E) explicit collusion

Question 18

-The minimum efficient scale for the firm in Figure 11-11

Accepted Answer

A) is less than Q₁ 
B) is Q₁ 
C) is Q₂ 
D) is Q₃ 
E) cannot be determined from this graph 
A) is less than Q₁ 
B) is Q₁ 
C) is Q₂ 
D) is Q₃ 
E) cannot be determined from this graph

Question 19

We can predict the outcome of a two-player game as long as

Accepted Answer

A) each player follows a strategy that negates the other player's strategy 
B) at least one player has a bilateral strategy 
C) neither player has a subsistence strategy 
D) neither player has a dominant strategy 
E) at least one of the players has a dominant strategy 
A) each player follows a strategy that negates the other player's strategy 
B) at least one player has a bilateral strategy 
C) neither player has a subsistence strategy 
D) neither player has a dominant strategy 
E) at least one of the players has a dominant strategy

Question 20

Natural oligopolies occur when

Accepted Answer

A) the government establishes a market with a few large producers 
B) the market output could be produced at a higher cost by several large firms rather than many small firms 
C) there are no barriers to entry 
D) the total market output could be produced at a lower cost by several large firms rather than many small firms 
E) one large firm can produce the total market output at a lower cost than several smaller firms could 
A) the government establishes a market with a few large producers 
B) the market output could be produced at a higher cost by several large firms rather than many small firms 
C) there are no barriers to entry 
D) the total market output could be produced at a lower cost by several large firms rather than many small firms 
E) one large firm can produce the total market output at a lower cost than several smaller firms could

An oligopolistic industry in which one firm sets the price is

Regardless of whether advertising is effective or not,it results in an increase in both fixed and total costs.

Technological changes that decrease minimum efficient scale

Which of the following would make cheating on a collusive agreement more likely?

Of the following markets,which is most likely to be monopolistically competitive?

When the oil-producing countries of the Middle East meet to set prices and output levels,this is an example of

Which of the following types of markets would be the most likely to maintain a successful collusive agreement?

-Consider the monopolistically competitive firm whose demand curve and cost structure are illustrated in Figure 11-1.Which of the following statements is correct in the short run?

Antitrust policies attempt to protect consumers by

If one were to rank the demand curve facing a firm from the least elastic to the most elastic,the ranking would be

Which of the following has contributed to decreased concentration in U.S.industry since the 1970s?

If a firm earns zero economic profit in the long run,then it

Price leadership

Any action,other than lowering its price,that a firm undertakes to increase the demand for its output is called

The output level at which a firm's long-run average total cost is minimized is known as its

The demand curve for Apple iTune music downloads is unstable because

When colluding oligopolists meet and formally agree on mutually beneficial strategies this is called

-The minimum efficient scale for the firm in Figure 11-11

We can predict the outcome of a two-player game as long as

Natural oligopolies occur when

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

An oligopolistic industry in which one firm sets the price is

Regardless of whether advertising is effective or not,it results in an increase in both fixed and total costs.

Technological changes that decrease minimum efficient scale

Which of the following would make cheating on a collusive agreement more likely?

Of the following markets,which is most likely to be monopolistically competitive?

When the oil-producing countries of the Middle East meet to set prices and output levels,this is an example of

Which of the following types of markets would be the most likely to maintain a successful collusive agreement?

-Consider the monopolistically competitive firm whose demand curve and cost structure are illustrated in Figure 11-1.Which of the following statements is correct in the short run?

Antitrust policies attempt to protect consumers by

If one were to rank the demand curve facing a firm from the least elastic to the most elastic,the ranking would be

Which of the following has contributed to decreased concentration in U.S.industry since the 1970s?

If a firm earns zero economic profit in the long run,then it

Price leadership

Any action,other than lowering its price,that a firm undertakes to increase the demand for its output is called

The output level at which a firm's long-run average total cost is minimized is known as its

The demand curve for Apple iTune music downloads is unstable because

When colluding oligopolists meet and formally agree on mutually beneficial strategies this is called

-The minimum efficient scale for the firm in Figure 11-11

We can predict the outcome of a two-player game as long as

Natural oligopolies occur when

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