Question 1

Heavy advertising expenditures usually indicate

Accepted Answer

A) oligopoly. 
B) pure competition or monopolistic competition. 
C) oligopoly or monopoly. 
D) differentiated pure competition or monopoly. 
A) oligopoly. 
B) pure competition or monopolistic competition. 
C) oligopoly or monopoly. 
D) differentiated pure competition or monopoly.

Question 2

What is a repeated game?
 Hoe does this helps the players in a game?

Accepted Answer

A repeated game is one that is played ov

Question 3

A monopolistically competitive firm

Accepted Answer

A) tries to differentiate its product from competitors' products. 
B) faces a perfectly elastic demand curve for its product. 
C) has more monopoly power in the long run than does a perfectly competitive firm. 
D) is always a retail establishment. 
A) tries to differentiate its product from competitors' products. 
B) faces a perfectly elastic demand curve for its product. 
C) has more monopoly power in the long run than does a perfectly competitive firm. 
D) is always a retail establishment.

Question 4

When an airline reduces its fares, other airlines typically match the action.But when an airline increases its fare, other airlines do not follow suit.Which oligopoly model cartel, price leadership, or kinked demand best fits the airline industry as described?
 Justify your choice and explain why the other models are less appropriate.

Accepted Answer

The interdependence fits the kinked dema

Question 5

Oligopolists seldom change prices, because they don't like change.

Accepted Answer

A) True 
 B)False

Question 6

Repeated games can lead to tacit collusion.

Accepted Answer

A) True 
 B)False

Question 7

Briefly and concisely define the following terms and explain their importance in the study of economics.
a.excess capacity theorem
b.price leadership
c.kinked demand curve
d.perfectly contestable market

Accepted Answer

a.The excess capacity theorem applies to

Question 8

An oligopoly is a market dominated by a few sellers.

Accepted Answer

A) True 
 B)False

Question 9

The behavior of the monopolistic firm:

Accepted Answer

A) ​maximizes the benefits to consumers, given the resources available to the economy. 
B) ​reduces output in order to raise prices in the short-term. 
C) ​results in excess capacity and inefficiency. 
D) ​both b and c 
A) ​maximizes the benefits to consumers, given the resources available to the economy. 
B) ​reduces output in order to raise prices in the short-term. 
C) ​results in excess capacity and inefficiency. 
D) ​both b and c

Question 10

A market which firms can enter if they choose and exit without losing money invested is

Accepted Answer

A) pure monopoly. 
B) duopoly. 
C) contestable. 
D) a market where there are kinked demand curves. 
A) pure monopoly. 
B) duopoly. 
C) contestable. 
D) a market where there are kinked demand curves.

Question 11

Advertising never makes sense for an oligopolistic firm.

Accepted Answer

A) True 
 B)False

Question 12

In the long run, a monopolistically competitive firm produces at minimum average cost.

Accepted Answer

A) True 
 B)False

Question 13

Under monopolistic competition, profits cannot persist because new firms will be attracted to the market.

Accepted Answer

A) True 
 B)False

Question 14

Define the following terms and explain their importance to the study of economics.
a.maximin criterion
b.Nash equilibrium
c.Dominant Strategy
d.Zero-sum game
e.Credible threat

Accepted Answer

a.Maximin criterion means selecting the

Question 15

International trade can be correctly considered as an example of a zero-sum game.

Accepted Answer

A) True 
 B)False

Question 16

Figure 12-2
  
-In Figure 12-2, which of the graphs represents a monopolistic competitor in long-run equilibrium?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 17

The contestable market theory best applies to

Accepted Answer

A) pure monopoly. 
B) oligopoly. 
C) monopolistic competition. 
D) perfect competition. 
A) pure monopoly. 
B) oligopoly. 
C) monopolistic competition. 
D) perfect competition.

Question 18

The demand curve facing a monopolistically competitive firm is generally

Accepted Answer

A) steeper than the demand curve that would face a perfectly competitive firm in the same industry. 
B) less elastic than the demand curve that would face a monopoly in the same industry. 
C) steeper and more elastic than the demand curve that would face a perfectly competitive firm in the same industry. 
D) flatter than the demand curve that would face a monopoly in the same industry. 
A) steeper than the demand curve that would face a perfectly competitive firm in the same industry. 
B) less elastic than the demand curve that would face a monopoly in the same industry. 
C) steeper and more elastic than the demand curve that would face a perfectly competitive firm in the same industry. 
D) flatter than the demand curve that would face a monopoly in the same industry.

Question 19

Figure 12-2
  
-In Figure 12-2, which of the graphs represents a firm that is a sales revenue maximizer?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 20

Define the following terms and explain their importance to the study of economics.
A)monopolistic competition
B)oligopoly
C)cartel
D)oligopolistic interdependence

Accepted Answer

a.monopolistic competition is a market s

Exam 12: Between Competition and Monopoly

Heavy advertising expenditures usually indicate

What is a repeated game? Hoe does this helps the players in a game?

A monopolistically competitive firm

Oligopolists seldom change prices, because they don't like change.

Repeated games can lead to tacit collusion.

Briefly and concisely define the following terms and explain their importance in the study of economics. a.excess capacity theorem b.price leadership c.kinked demand curve d.perfectly contestable market

An oligopoly is a market dominated by a few sellers.

The behavior of the monopolistic firm:

A market which firms can enter if they choose and exit without losing money invested is

Advertising never makes sense for an oligopolistic firm.

In the long run, a monopolistically competitive firm produces at minimum average cost.

Under monopolistic competition, profits cannot persist because new firms will be attracted to the market.

Define the following terms and explain their importance to the study of economics. a.maximin criterion b.Nash equilibrium c.Dominant Strategy d.Zero-sum game e.Credible threat

International trade can be correctly considered as an example of a zero-sum game.

Figure 12-2 -In Figure 12-2, which of the graphs represents a monopolistic competitor in long-run equilibrium?

The contestable market theory best applies to

The demand curve facing a monopolistically competitive firm is generally

Figure 12-2 -In Figure 12-2, which of the graphs represents a firm that is a sales revenue maximizer?

Define the following terms and explain their importance to the study of economics. A)monopolistic competition B)oligopoly C)cartel D)oligopolistic interdependence

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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