Question 1

Resale price maintenance can be illegal

Accepted Answer

A) under the Clayton Act. 
B) under the Sherman Act. 
C) only if the distributors engage in predatory pricing. 
D) if distributors tell the manufacturer the maximum price at which they will sell the product. 
E) only when it is combined with territorial confinement. 
A) under the Clayton Act. 
B) under the Sherman Act. 
C) only if the distributors engage in predatory pricing. 
D) if distributors tell the manufacturer the maximum price at which they will sell the product. 
E) only when it is combined with territorial confinement.

Question 2

-Intel and AMD are a duopoly that produce CPU chips.Intel and AMD can conduct R&D or they can not conduct R&D.The table above shows the payoff matrix for the two firms.If AMD is playing a tit-for-tat strategy, then if Intel conducted R&D last period, AMD

Accepted Answer

A) definitely conducts R&D this period. 
B) definitely does not conduct R&D this period. 
C) might conduct R&D or might not conduct R&D, depending on Intel's profit. 
D) might conduct R&D or might not conduct R&D, depending on its profit. 
E) might conduct R&D or might not conduct R&D, but more information is needed to determine its action. 
A) definitely conducts R&D this period. 
B) definitely does not conduct R&D this period. 
C) might conduct R&D or might not conduct R&D, depending on Intel's profit. 
D) might conduct R&D or might not conduct R&D, depending on its profit. 
E) might conduct R&D or might not conduct R&D, but more information is needed to determine its action.

Question 3

Firms in oligopoly can achieve an economic profit

Accepted Answer

A) always in the long run. 
B) if they cooperate. 
C) only if the demand for their products is inelastic. 
D) only if the demand for their products is elastic. 
E) if they reach the non-cooperative equilibrium. 
A) always in the long run. 
B) if they cooperate. 
C) only if the demand for their products is inelastic. 
D) only if the demand for their products is elastic. 
E) if they reach the non-cooperative equilibrium.

Question 4

Game theory is used to analyze the interactions among firms in ________.

Accepted Answer

A) oligopoly 
B) perfect competition 
C) monopoly 
D) monopolistic competition 
E) Both answers A and D are correct. 
A) oligopoly 
B) perfect competition 
C) monopoly 
D) monopolistic competition 
E) Both answers A and D are correct.

Question 5

-A market has ten firms, whose market shares are given in the table above.
a∙If firms I and J wanted to merge, according to the Department of Justice guidelines, would the Federal Trade Commission challenge the merger?
b∙If firms A and B wanted to merge, according to the Federal Trade Commission guidelines, would the Federal Trade Commission challenge the merger?

Accepted Answer

a∙The decision whether to challenge the

Question 6

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve, economies of scale limit the market to ________ firm(s).

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
E) 8 
A) 1 
B) 2 
C) 3 
D) 4 
E) 8

Question 7

The prisoners' dilemma game

Accepted Answer

A) shows that prisoners are better off if they cooperate. 
B) shows it is easy to cooperate. 
C) has an equilibrium in which both prisoners are made as well off as possible. 
D) would have the same outcome even if the prisoners can communicate and cooperate. 
E) has an equilibrium in which one prisoner is made as well off as possible and the other prisoner is made as worse off as possible. 
A) shows that prisoners are better off if they cooperate. 
B) shows it is easy to cooperate. 
C) has an equilibrium in which both prisoners are made as well off as possible. 
D) would have the same outcome even if the prisoners can communicate and cooperate. 
E) has an equilibrium in which one prisoner is made as well off as possible and the other prisoner is made as worse off as possible.

Question 8

-The table above shows the payoff matrix offered to two suspected criminals, Bonnie and Clyde.The payoffs are the years they will spend in prison.The suspected criminals are not allowed to communicate.Which of the following statements correctly describes the equilibrium choices made by Bonnie and Clyde?

Accepted Answer

A) The Nash equilibrium is the best outcome for Bonnie and Clyde. 
B) There is no equilibrium in this game. 
C) In the Nash equilibrium, both Bonnie and Clyde deny committing the crime. 
D) Bonnie and Clyde could improve upon the Nash equilibrium if they could communicate. 
E) Bonnie and Clyde get the best outcome for themselves because they are not allowed to communicate. 
A) The Nash equilibrium is the best outcome for Bonnie and Clyde. 
B) There is no equilibrium in this game. 
C) In the Nash equilibrium, both Bonnie and Clyde deny committing the crime. 
D) Bonnie and Clyde could improve upon the Nash equilibrium if they could communicate. 
E) Bonnie and Clyde get the best outcome for themselves because they are not allowed to communicate.

Question 9

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve, then ________ limit the market to 3 firms.

Accepted Answer

A) economies of scale 
B) a "tit for tat" strategy 
C) collusion 
D) a Nash equilibrium 
E) legal requirements 
A) economies of scale 
B) a "tit for tat" strategy 
C) collusion 
D) a Nash equilibrium 
E) legal requirements

Question 10

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

Accepted Answer

No other market structure has the charac

Question 11

The range in which a duopoly's output falls is less than or equal to the output level in ________ and more than or equal to the output level in ________.

Accepted Answer

A) monopolistic competition; monopoly 
B) monopolistic competition; perfect competition 
C) perfect competition; monopoly 
D) monopoly; monopolistic competition 
E) monopoly; perfect competition 
A) monopolistic competition; monopoly 
B) monopolistic competition; perfect competition 
C) perfect competition; monopoly 
D) monopoly; monopolistic competition 
E) monopoly; perfect competition

Question 12

If a duopoly has reached the monopoly outcome, a firm can increase its profit by if it and it alone ________ its price and ________ its production.

Accepted Answer

A) raises; increases 
B) raises; decreases 
C) lowers; increases 
D) lowers; decreases 
E) raises; does not change 
A) raises; increases 
B) raises; decreases 
C) lowers; increases 
D) lowers; decreases 
E) raises; does not change

Question 13

"If firms in an oligopoly operate as a monopoly, the industry produces the most output and if they operate as perfect competitors, the industry produces the least output." Is the previous statement correct or incorrect? Why?

Accepted Answer

The statement is incorrect; it reverses

Question 14

Oligopoly is a market structure in which

Accepted Answer

A) many firms each produce a slightly differentiated product. 
B) one firm produces a unique product. 
C) a small number of firms compete. 
D) many firms produce an identical product. 
E) the number of firms is so small that they do not compete with each other. 
A) many firms each produce a slightly differentiated product. 
B) one firm produces a unique product. 
C) a small number of firms compete. 
D) many firms produce an identical product. 
E) the number of firms is so small that they do not compete with each other.

Question 15

-What three characteristics do all games have in common?

Accepted Answer

The all ha

Question 16

-The table above shows the payoff matrix offered to two suspected criminals, Bonnie and Clyde.The payoffs are the years they will spend in prison.The suspected criminals are not allowed to communicate.Given the information in the payoff matrix, the Nash equilibrium is that Bonnie ________ and Clyde ________.

Accepted Answer

A) confesses; denies 
B) confesses; confesses 
C) denies; denies 
D) denies; confesses 
E) denies; either confess or denies, either outcome is consistent with the Nash equilibrium. 
A) confesses; denies 
B) confesses; confesses 
C) denies; denies 
D) denies; confesses 
E) denies; either confess or denies, either outcome is consistent with the Nash equilibrium.

Question 17

The Clayton Act

Accepted Answer

A) replaced the Sherman Act. 
B) along with its amendments, outlawed several business practices if they substantially lessened competition or created monopoly. 
C) along with its amendments, prohibited all business practices that substantially lessen competition or create monopoly. 
D) was the first anti-trust law in the United States. 
E) was repealed in 1985. 
A) replaced the Sherman Act. 
B) along with its amendments, outlawed several business practices if they substantially lessened competition or created monopoly. 
C) along with its amendments, prohibited all business practices that substantially lessen competition or create monopoly. 
D) was the first anti-trust law in the United States. 
E) was repealed in 1985.

Question 18

Tying arrangements

Accepted Answer

A) require retailers to charge a specific price determined by the manufacturer. 
B) require a buyer to purchase one product in order to buy another, different product. 
C) are illegal under the Sherman Act. 
D) always allow a firm to increase its market power. 
E) are always illegal under the Clayton Act. 
A) require retailers to charge a specific price determined by the manufacturer. 
B) require a buyer to purchase one product in order to buy another, different product. 
C) are illegal under the Sherman Act. 
D) always allow a firm to increase its market power. 
E) are always illegal under the Clayton Act.

Question 19

In the case of two recently proposed mergers, PepsiCo buying 7-Up and Coca-Cola buying Dr.Pepper, the government blocked

Accepted Answer

A) the PepsiCo but not the Coca-Cola merger. 
B) the Coca-Cola but not the PepsiCo merger. 
C) both mergers. 
D) neither merger. 
E) the Coca-Cola merger and tried to block, but failed, the PepsiCo merger. 
A) the PepsiCo but not the Coca-Cola merger. 
B) the Coca-Cola but not the PepsiCo merger. 
C) both mergers. 
D) neither merger. 
E) the Coca-Cola merger and tried to block, but failed, the PepsiCo merger.

Question 20

As a result of a wave of mergers in the early part of the twentieth century, which act was passed?

Accepted Answer

A) the Anti-Merger Act of 1900 
B) the Sherman Act of 1909 
C) the Clayton Act of 1914 
D) the Horizontal Merger Act of 1919 
E) the Pro-Competition Act of 1912 
A) the Anti-Merger Act of 1900 
B) the Sherman Act of 1909 
C) the Clayton Act of 1914 
D) the Horizontal Merger Act of 1919 
E) the Pro-Competition Act of 1912

Resale price maintenance can be illegal

-Intel and AMD are a duopoly that produce CPU chips.Intel and AMD can conduct R&D or they can not conduct R&D.The table above shows the payoff matrix for the two firms.If AMD is playing a tit-for-tat strategy, then if Intel conducted R&D last period, AMD

Firms in oligopoly can achieve an economic profit

Game theory is used to analyze the interactions among firms in ________.

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve, economies of scale limit the market to ________ firm(s).

The prisoners' dilemma game

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve, then ________ limit the market to 3 firms.

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

The range in which a duopoly's output falls is less than or equal to the output level in and more than or equal to the output level in .

If a duopoly has reached the monopoly outcome, a firm can increase its profit by if it and it alone its price and its production.

"If firms in an oligopoly operate as a monopoly, the industry produces the most output and if they operate as perfect competitors, the industry produces the least output." Is the previous statement correct or incorrect? Why?

Oligopoly is a market structure in which

-What three characteristics do all games have in common?

-The table above shows the payoff matrix offered to two suspected criminals, Bonnie and Clyde.The payoffs are the years they will spend in prison.The suspected criminals are not allowed to communicate.Given the information in the payoff matrix, the Nash equilibrium is that Bonnie and Clyde .

The Clayton Act

Tying arrangements

In the case of two recently proposed mergers, PepsiCo buying 7-Up and Coca-Cola buying Dr.Pepper, the government blocked

As a result of a wave of mergers in the early part of the twentieth century, which act was passed?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

Exam 18: Oligopoly

Resale price maintenance can be illegal

-Intel and AMD are a duopoly that produce CPU chips.Intel and AMD can conduct R&D or they can not conduct R&D.The table above shows the payoff matrix for the two firms.If AMD is playing a tit-for-tat strategy, then if Intel conducted R&D last period, AMD

Firms in oligopoly can achieve an economic profit

Game theory is used to analyze the interactions among firms in ________.

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve, economies of scale limit the market to ________ firm(s).

The prisoners' dilemma game

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve, then ________ limit the market to 3 firms.

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

The range in which a duopoly's output falls is less than or equal to the output level in ________ and more than or equal to the output level in ________.

If a duopoly has reached the monopoly outcome, a firm can increase its profit by if it and it alone ________ its price and ________ its production.

"If firms in an oligopoly operate as a monopoly, the industry produces the most output and if they operate as perfect competitors, the industry produces the least output." Is the previous statement correct or incorrect? Why?

Oligopoly is a market structure in which

-What three characteristics do all games have in common?

The Clayton Act

Tying arrangements

In the case of two recently proposed mergers, PepsiCo buying 7-Up and Coca-Cola buying Dr.Pepper, the government blocked

As a result of a wave of mergers in the early part of the twentieth century, which act was passed?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

The range in which a duopoly's output falls is less than or equal to the output level in and more than or equal to the output level in .

If a duopoly has reached the monopoly outcome, a firm can increase its profit by if it and it alone its price and its production.