Question 1

As the number of firms in an oligopoly market grows larger,what will the price approach

Accepted Answer

A) marginal cost 
B) average variable cost 
C) zero 
D) the monopoly price 
A) marginal cost 
B) average variable cost 
C) zero 
D) the monopoly price

Question 2

How do equilibrium prices in markets characterized by oligopoly compare with those in monopolies and perfectly competitive markets

Accepted Answer

A) They are higher than in monopoly markets and higher than in perfectly competitive markets. 
B) They are higher than in monopoly markets and lower than in perfectly competitive markets. 
C) They are lower than in monopoly markets and higher than in perfectly competitive markets. 
D) They are lower than in monopoly markets and lower than in perfectly competitive markets. 
A) They are higher than in monopoly markets and higher than in perfectly competitive markets. 
B) They are higher than in monopoly markets and lower than in perfectly competitive markets. 
C) They are lower than in monopoly markets and higher than in perfectly competitive markets. 
D) They are lower than in monopoly markets and lower than in perfectly competitive markets.

Question 3

In a particular town,Xpressdata and Blazedata are the only two providers of wireless Internet service.What do Xpressdata and Blazedata constitute

Accepted Answer

A) a duopoly, whether they collude or not 
B) a cartel, whether they collude or not 
C) a Nash industry, whether they collude or not 
D) a monopolistically competitive industry, whether they collude or not 
A) a duopoly, whether they collude or not 
B) a cartel, whether they collude or not 
C) a Nash industry, whether they collude or not 
D) a monopolistically competitive industry, whether they collude or not

Question 4

Which of the following does NOT explain why oligopolies often fail to maintain cooperation

Accepted Answer

A) the story of the prisoners' dilemma 
B) game theory 
C) the fact that self-interest is consistent with collective group interest 
D) the fact that self-interest is not always consistent with collective group interest 
A) the story of the prisoners' dilemma 
B) game theory 
C) the fact that self-interest is consistent with collective group interest 
D) the fact that self-interest is not always consistent with collective group interest

Question 5

What is the basic characteristic of a market that is characterized by imperfect competition

Accepted Answer

A) Firms are price takers. 
B) There are generally a large number of firms. 
C) There are at least a few firms that compete with one another. 
D) The actions of one firm in the market have no impact on the other firms' profits. 
A) Firms are price takers. 
B) There are generally a large number of firms. 
C) There are at least a few firms that compete with one another. 
D) The actions of one firm in the market have no impact on the other firms' profits.

Question 6

What did the Competition Act define a cooperative agreement to be

Accepted Answer

A) unenforceable outside of established judicial review processes 
B) enforceable with proper judicial review 
C) a criminal conspiracy 
D) a crime, but did not give direction on possible penalties 
A) unenforceable outside of established judicial review processes 
B) enforceable with proper judicial review 
C) a criminal conspiracy 
D) a crime, but did not give direction on possible penalties

Question 7

Two major athletic shoe companies are each considering whether or not to advertise during the Super Bowl. Devise a simple prisoners' dilemma game to demonstrate the strategic considerations that are relevant to this decision. Does the repeated game scenario differ from a single-period game? Is it possible that a repeated game (without collusive agreements) could lead to an outcome that is better than a single-period game? Explain the circumstances in which this may be true.

Accepted Answer

The answer should show that if both shoe

Question 8

Oligopolies would like to act like which of the following

Accepted Answer

A) duopoly, but self-interest often drives them closer to competition 
B) competitive firms, but self-interest often drives them closer to duopoly 
C) monopoly, but self-interest often drives them closer to duopoly 
D) monopoly, but self-interest often drives them closer to competition 
A) duopoly, but self-interest often drives them closer to competition 
B) competitive firms, but self-interest often drives them closer to duopoly 
C) monopoly, but self-interest often drives them closer to duopoly 
D) monopoly, but self-interest often drives them closer to competition

Question 9

How are oligopolists generally best off,in terms of their profits

Accepted Answer

A) operating in a Nash equilibrium 
B) producing a total quantity of output that falls short of the Nash-equilibrium total quantity 
C) producing a total quantity of output that exceeds the Nash-equilibrium total quantity 
D) charging a price that falls short of the Nash-equilibrium price 
A) operating in a Nash equilibrium 
B) producing a total quantity of output that falls short of the Nash-equilibrium total quantity 
C) producing a total quantity of output that exceeds the Nash-equilibrium total quantity 
D) charging a price that falls short of the Nash-equilibrium price

Question 10

Explain how the output effect and the price effect influence the production decision of the individual oligopolist.

Accepted Answer

Since the individual oligopolist faces a

Question 11

Like monopolists,what do oligopolists know about the result of an increase in the quantity of output

Accepted Answer

A) It reduces the price of their product. 
B) It reduces their profit. 
C) It reduces their revenue. 
D) It reduces productivity. 
A) It reduces the price of their product. 
B) It reduces their profit. 
C) It reduces their revenue. 
D) It reduces productivity.

Question 12

In Berserk, two political parties vie for control of the country. Each political party, when it is not in power, has a tendency to call general strikes to influence the policy of the ruling party. Evaluate this strategy in the context of a multiple-period game. Is it possible, in this situation, that a multiple-period game reduces, rather than enhances, social well-being? What would have to happen in this game to improve social welfare if a tit-for-tat strategy is used?

Accepted Answer

The multi-period game is likely to follo

Question 13

Evaluate economic welfare under oligopolistic competition.

Accepted Answer

In the case of oligopolists trying to ma

Question 14

One way that public policy encourages cooperation among oligopolists is through common law.

Accepted Answer

A) True 
 B)False

Question 15

What do dominant strategies in a two-person game often lead to

Accepted Answer

A) a less-preferred outcome for both players 
B) the best possible outcome for both players 
C) one person gaining advantage at the expense of the other person 
D) the worst possible outcomes for both players 
A) a less-preferred outcome for both players 
B) the best possible outcome for both players 
C) one person gaining advantage at the expense of the other person 
D) the worst possible outcomes for both players

Question 16

The game that monopolists play in trying to reach the monopoly outcome is similar to the game that the two prisoners play in the prisoners' dilemma.

Accepted Answer

A) True 
 B)False

Question 17

Scenario 17-1
Assume that the countries of Irun and Urun are the only two producers of crude oil.Further assume that both countries have entered into an agreement to maintain certain production levels in order to maximize profits.In the world market for oil, the demand curve is downward sloping.
-Refer to Scenario 17-1.In a nonrepetitive game,what is the dominant strategy of Irun when production levels are in accordance with the collusive agreement

Accepted Answer

A) increase production only after Urun increases production 
B) decrease production only after Urun increases production 
C) unilaterally decrease production 
D) unilaterally increase production 
A) increase production only after Urun increases production 
B) decrease production only after Urun increases production 
C) unilaterally decrease production 
D) unilaterally increase production

Question 18

Total profit for all firms in an oligopolistic market is greater than that of a monopolist,assuming no price-fixing occurs in the market.

Accepted Answer

A) True 
 B)False

Question 19

As a group,how would oligopolists generally be better off

Accepted Answer

A) if they would produce the perfectly competitive quantity of output 
B) if they would produce more than the perfectly competitive quantity of output 
C) if they would charge the same price that a monopolist would charge if the market were a monopoly 
D) if they would operate according to their own individual self-interests 
A) if they would produce the perfectly competitive quantity of output 
B) if they would produce more than the perfectly competitive quantity of output 
C) if they would charge the same price that a monopolist would charge if the market were a monopoly 
D) if they would operate according to their own individual self-interests

Question 20

Oligopolies can end up looking like competitive markets if the number and behaviour of firms is which of the following

Accepted Answer

A) large and cooperative 
B) large and noncooperative 
C) small and cooperative 
D) small and noncooperative 
A) large and cooperative 
B) large and noncooperative 
C) small and cooperative 
D) small and noncooperative

As the number of firms in an oligopoly market grows larger,what will the price approach

How do equilibrium prices in markets characterized by oligopoly compare with those in monopolies and perfectly competitive markets

In a particular town,Xpressdata and Blazedata are the only two providers of wireless Internet service.What do Xpressdata and Blazedata constitute

Which of the following does NOT explain why oligopolies often fail to maintain cooperation

What is the basic characteristic of a market that is characterized by imperfect competition

What did the Competition Act define a cooperative agreement to be

Oligopolies would like to act like which of the following

How are oligopolists generally best off,in terms of their profits

Explain how the output effect and the price effect influence the production decision of the individual oligopolist.

Like monopolists,what do oligopolists know about the result of an increase in the quantity of output

Evaluate economic welfare under oligopolistic competition.

One way that public policy encourages cooperation among oligopolists is through common law.

What do dominant strategies in a two-person game often lead to

The game that monopolists play in trying to reach the monopoly outcome is similar to the game that the two prisoners play in the prisoners' dilemma.

Total profit for all firms in an oligopolistic market is greater than that of a monopolist,assuming no price-fixing occurs in the market.

As a group,how would oligopolists generally be better off

Oligopolies can end up looking like competitive markets if the number and behaviour of firms is which of the following

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Exam 17: Oligopoly

As the number of firms in an oligopoly market grows larger,what will the price approach

How do equilibrium prices in markets characterized by oligopoly compare with those in monopolies and perfectly competitive markets

In a particular town,Xpressdata and Blazedata are the only two providers of wireless Internet service.What do Xpressdata and Blazedata constitute

Which of the following does NOT explain why oligopolies often fail to maintain cooperation

What is the basic characteristic of a market that is characterized by imperfect competition

What did the Competition Act define a cooperative agreement to be

Oligopolies would like to act like which of the following

How are oligopolists generally best off,in terms of their profits

Explain how the output effect and the price effect influence the production decision of the individual oligopolist.

Like monopolists,what do oligopolists know about the result of an increase in the quantity of output

Evaluate economic welfare under oligopolistic competition.

One way that public policy encourages cooperation among oligopolists is through common law.

What do dominant strategies in a two-person game often lead to

The game that monopolists play in trying to reach the monopoly outcome is similar to the game that the two prisoners play in the prisoners' dilemma.

Total profit for all firms in an oligopolistic market is greater than that of a monopolist,assuming no price-fixing occurs in the market.

As a group,how would oligopolists generally be better off

Oligopolies can end up looking like competitive markets if the number and behaviour of firms is which of the following

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters