Question 1

In the prisoners' dilemma with players Art and Bob, each prisoner would be best off if

Accepted Answer

A) both prisoners confess. 
B) both prisoners deny. 
C) Art denies and Bob confesses. 
D) Bob denies and Art confesses. 
E) none of the above is done. 
A) both prisoners confess. 
B) both prisoners deny. 
C) Art denies and Bob confesses. 
D) Bob denies and Art confesses. 
E) none of the above is done.

Question 2

Use the information below to answer the following questions.
Fact 15.2.1
Two firms, FastNet and SmartCast are the only Internet providers in a city. They have identical costs and one firm's service is a perfect substitute for the other firm's service. The industry is a natural duopoly. FastNet and SmartCast decide to collude and agree to share the market equally.
-Refer to Fact 15.2.1.What is the result if both firms cheat on the agreement?

Accepted Answer

A) Both firms make an economic profit that is less than if they had both complied with the agreement. 
B) Economic profit of both firms is maximized. 
C) Both firms are playing a game of chicken. 
D) Only one firm is playing a game of chicken. 
E) Market output decreases. 
A) Both firms make an economic profit that is less than if they had both complied with the agreement. 
B) Economic profit of both firms is maximized. 
C) Both firms are playing a game of chicken. 
D) Only one firm is playing a game of chicken. 
E) Market output decreases.

Question 3

Which one of the following characteristics applies to oligopolistic markets?

Accepted Answer

A) There is a large number of firms. 
B) The absence of barriers to entry of firms. 
C) Firms are large relative to the size of the market. 
D) All firms are price takers. 
E) Firms produce only differentiated products. 
A) There is a large number of firms. 
B) The absence of barriers to entry of firms. 
C) Firms are large relative to the size of the market. 
D) All firms are price takers. 
E) Firms produce only differentiated products.

Question 4

Table 15.2.10
  
-Refer to Table 15.2.10.Firm A and Firm B are the only producers of soap powder.They collude and agree to share the market equally.The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________.

Accepted Answer

A) is; to comply regardless of the other firm's choice 
B) is not; to comply when the other firm cheats and to cheat when the other firm complies 
C) is; to cheat regardless of the other firm's choice 
D) is not; to comply when the other firm complies and to cheat when the other firm cheats 
E) is; to comply when the other firm cheats and to cheat when the other firm complies 
A) is; to comply regardless of the other firm's choice 
B) is not; to comply when the other firm cheats and to cheat when the other firm complies 
C) is; to cheat regardless of the other firm's choice 
D) is not; to comply when the other firm complies and to cheat when the other firm cheats 
E) is; to comply when the other firm cheats and to cheat when the other firm complies

Question 5

Which of the following quotes shows a contestable market in the widget industry?

Accepted Answer

A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." 
B) "I am producing more widgets than Wally and I agreed to in our talk last week." 
C) "If only Wally and I could agree on a higher price, we could make more profits." 
D) "I have been spending extra on research and development of my new two-way widget." 
E) None of the above 
A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." 
B) "I am producing more widgets than Wally and I agreed to in our talk last week." 
C) "If only Wally and I could agree on a higher price, we could make more profits." 
D) "I have been spending extra on research and development of my new two-way widget." 
E) None of the above

Question 6

If the efficient scale of production only allows three firms to supply a market, the market is a

Accepted Answer

A) three-firm monopoly. 
B) cost-based oligopoly. 
C) natural oligopoly. 
D) monopolistic competition. 
E) competitive monopoly. 
A) three-firm monopoly. 
B) cost-based oligopoly. 
C) natural oligopoly. 
D) monopolistic competition. 
E) competitive monopoly.

In the prisoners' dilemma with players Art and Bob, each prisoner would be best off if

Which one of the following characteristics applies to oligopolistic markets?

Table 15.2.10 -Refer to Table 15.2.10.Firm A and Firm B are the only producers of soap powder.They collude and agree to share the market equally.The equilibrium a dominant strategy equilibrium because the strategy in this game is for a firm .

Which of the following quotes shows a contestable market in the widget industry?

If the efficient scale of production only allows three firms to supply a market, the market is a

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 15: Oligopoly

In the prisoners' dilemma with players Art and Bob, each prisoner would be best off if

Which one of the following characteristics applies to oligopolistic markets?

Table 15.2.10 -Refer to Table 15.2.10.Firm A and Firm B are the only producers of soap powder.They collude and agree to share the market equally.The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________.

Which of the following quotes shows a contestable market in the widget industry?

If the efficient scale of production only allows three firms to supply a market, the market is a

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Table 15.2.10 -Refer to Table 15.2.10.Firm A and Firm B are the only producers of soap powder.They collude and agree to share the market equally.The equilibrium a dominant strategy equilibrium because the strategy in this game is for a firm .