Question 1

The most widely used approach for the analysis of oligopoly behavior is

Accepted Answer

A) game theory. 
B) role playing. 
C) strategic engineering. 
D) input-output analysis. 
A) game theory. 
B) role playing. 
C) strategic engineering. 
D) input-output analysis.

Question 2

In ____, each competing firm is determined to sell at a price that is lower than the prices of its rivals, often regardless of whether that price covers the pertinent cost.

Accepted Answer

A) market skimming 
B) a monopoly 
C) a price war 
D) perfect competition 
A) market skimming 
B) a monopoly 
C) a price war 
D) perfect competition

Question 3

The short-run equilibrium of the firm under monopolistic competition has excess capacity.

Accepted Answer

A) True 
 B)False

Question 4

The demand curve for a monopolistic competitor is likely to be flatter than that of a monopolist.

Accepted Answer

A) True 
 B)False

Question 5

Figure 12-3
  
-In Figure 12-3, demand curve CAD represents a market in which oligopolists will match the price changes of rivals and demand curve EAB represents a market in which oligopolists will ignore the price changes of rivals.According to the kinked demand model, the relevant demand curve will be

Accepted Answer

A) demand curve CAB. 
B) demand curve CAD. 
C) demand curve EAD. 
D) demand curve EAB. 
A) demand curve CAB. 
B) demand curve CAD. 
C) demand curve EAD. 
D) demand curve EAB.

Question 6

If firms meet together to decide on prices and outputs there is

Accepted Answer

A) overt collusion. 
B) tacit collusion. 
C) price leadership. 
D) None of the above are correct. 
A) overt collusion. 
B) tacit collusion. 
C) price leadership. 
D) None of the above are correct.

Question 7

The excess capacity theorem states that

Accepted Answer

A) society is worse off with fewer monopolistic competitors. 
B) costs of production under monopolistic competition can be lowered by reducing the number of producers. 
C) lack of excess capacity leads to shortages during periods of unexpected growth in demand for goods produced by monopolistic competition. 
D) there is too much choice in our economy. 
A) society is worse off with fewer monopolistic competitors. 
B) costs of production under monopolistic competition can be lowered by reducing the number of producers. 
C) lack of excess capacity leads to shortages during periods of unexpected growth in demand for goods produced by monopolistic competition. 
D) there is too much choice in our economy.

Question 8

Oligopolistic firms never collude because they have almost no incentive to do so.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an example of tacit collusion?

Accepted Answer

A) OPEC 
B) copper cartel 
C) price leadership 
D) government franchise granted to a utility 
A) OPEC 
B) copper cartel 
C) price leadership 
D) government franchise granted to a utility

Question 10

Game theory can be used to investigate

Accepted Answer

A) why cartels break down. 
B) why some firms maintain excess productive capacity. 
C) how oligopolists set prices. 
D) All of the above are correct. 
A) why cartels break down. 
B) why some firms maintain excess productive capacity. 
C) how oligopolists set prices. 
D) All of the above are correct.

Exam 12: Between Competition and Monopoly

The most widely used approach for the analysis of oligopoly behavior is

In ____, each competing firm is determined to sell at a price that is lower than the prices of its rivals, often regardless of whether that price covers the pertinent cost.

The short-run equilibrium of the firm under monopolistic competition has excess capacity.

The demand curve for a monopolistic competitor is likely to be flatter than that of a monopolist.

If firms meet together to decide on prices and outputs there is

The excess capacity theorem states that

Oligopolistic firms never collude because they have almost no incentive to do so.

Which of the following is an example of tacit collusion?

Game theory can be used to investigate

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

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