Question 1

Firms decide how much to spend on product development and marketing by

Accepted Answer

A) spending the same amount as they did in previous years. 
B) spending the historical average of 1/4 of total production cost. 
C) determining what it will take to eliminate excess capacity. 
D) balancing the cost and the benefit of product development and marketing. 
E) ensuring that the marginal cost of product development and marketing is less than or equal to the marginal cost of producing the good or service. 
A) spending the same amount as they did in previous years. 
B) spending the historical average of 1/4 of total production cost. 
C) determining what it will take to eliminate excess capacity. 
D) balancing the cost and the benefit of product development and marketing. 
E) ensuring that the marginal cost of product development and marketing is less than or equal to the marginal cost of producing the good or service.

Question 2

The three largest firms in an industry have market shares of 40 percent, 30 percent, and 2 percent. The remaining 47 firms in the industry each have a market share of 1 percent. The Herfindahl-Hirschman Index (HHI)for this industry is ________.

Accepted Answer

A) 2,551 
B) 5,184 
C) 24,061 
D) 10,000 
E) 3,013 
A) 2,551 
B) 5,184 
C) 24,061 
D) 10,000 
E) 3,013

Question 3

Boeing and Airbus have entered into a cartel agreement that will enable them to boost their profits. What occurs if Boeing decides to cheat on the agreement?
I. Boeing lowers the price of its airplanes.
Ii. The total industry output increases.
Iii. The total profits in the airplane industry will decrease.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) i, ii, and iii

Question 4

Which of the following is the best example of a differentiated product?

Accepted Answer

A) beets in the local supermarket 
B) diamonds 
C) airlines 
D) running shoes 
E) electricity 
A) beets in the local supermarket 
B) diamonds 
C) airlines 
D) running shoes 
E) electricity

Question 5

Explain the role of advertising in monopolistic competition. Describe how advertising by all firms in a monopolistically competitive industry impacts a firm's ATC curve, its MC curve, its demand curve, and its MR curve.

Accepted Answer

In order to maintain (or regain)economic

Question 6

What is the legal status of a cartel among firms in the United States?

Accepted Answer

Cartels are illegal

Question 7

If one firm in a duopoly increases its production by one unit beyond the monopoly output, that firm's profit ________, the other firm's profit ________, and the total profit of the duopoly ________.

Accepted Answer

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

Question 8

-Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. What price will Kevin charge per session?

Accepted Answer

A) $100 
B) $60 
C) $40 
D) $20 
E) $80 
A) $100 
B) $60 
C) $40 
D) $20 
E) $80

Question 9

All games have which features?

Accepted Answer

A) prices, rules, and payoffs 
B) rules, markets, and prices 
C) rules, strategies, and payoffs 
D) rules, strategies, and costs 
E) equilibrium, prices, and quantities 
A) prices, rules, and payoffs 
B) rules, markets, and prices 
C) rules, strategies, and payoffs 
D) rules, strategies, and costs 
E) equilibrium, prices, and quantities

Question 10

If the four-firm concentration ratio for the market for pizza is 28 percent, then this industry is best characterized as

Accepted Answer

A) a monopoly. 
B) monopolistic competition. 
C) an oligopoly. 
D) perfect competition. 
E) oligopolistic competition. 
A) a monopoly. 
B) monopolistic competition. 
C) an oligopoly. 
D) perfect competition. 
E) oligopolistic competition.

Question 11

What three characteristics do all games have in common?

Accepted Answer

The all ha

Question 12

A firm in monopolistic competition makes its decisions on quantity and price by

Accepted Answer

A) taking price as given from the market and producing where MR = MC. 
B) taking both price and quantity as given from the market. 
C) producing where MR = MC and setting the price for this quantity from the demand curve. 
D) taking quantity as given from the market and setting the price for this quantity from the demand curve. 
E) producing where MR = MC and setting the price so that P = MR = MC. 
A) taking price as given from the market and producing where MR = MC. 
B) taking both price and quantity as given from the market. 
C) producing where MR = MC and setting the price for this quantity from the demand curve. 
D) taking quantity as given from the market and setting the price for this quantity from the demand curve. 
E) producing where MR = MC and setting the price so that P = MR = MC.

Question 13

Monopolistic competition is a market structure in which

Accepted Answer

A) firms face barriers to entry. 
B) a large number of firms compete. 
C) firms produce and sell an identical product. 
D) firms face perfectly elastic demand for their product. 
E) the firms have no ability to influence the price of their product. 
A) firms face barriers to entry. 
B) a large number of firms compete. 
C) firms produce and sell an identical product. 
D) firms face perfectly elastic demand for their product. 
E) the firms have no ability to influence the price of their product.

Question 14

If a duopoly has reached the monopoly outcome and only one firm increases its production, that firm's profit ________ and the other firm's profit ________.

Accepted Answer

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

Question 15

If a monopolistically competitive seller's marginal cost is $3.56, the firm will increase its output if

Accepted Answer

A) its marginal revenue is less than $3.56. 
B) its marginal revenue is equal to $3.56. 
C) its marginal revenue is more than $3.56. 
D) average total cost is less than $3.56. 
E) Both answers A and D are correct. 
A) its marginal revenue is less than $3.56. 
B) its marginal revenue is equal to $3.56. 
C) its marginal revenue is more than $3.56. 
D) average total cost is less than $3.56. 
E) Both answers A and D are correct.

Question 16

In a market in which firms operate in monopolistic competition,

Accepted Answer

A) the HHI for a single firm exceeds 2500. 
B) firms compete on price, quality and marketing. 
C) in the long run firms produce at their efficient scale. 
D) in the long run firms are not able to charge a markup. 
E) advertising is nonexistent. 
A) the HHI for a single firm exceeds 2500. 
B) firms compete on price, quality and marketing. 
C) in the long run firms produce at their efficient scale. 
D) in the long run firms are not able to charge a markup. 
E) advertising is nonexistent.

Question 17

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 18

-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 19

In the long run, firms in monopolistic competition earn zero economic profit because

Accepted Answer

A) firms are free to enter and exit. 
B) their products are similar but slightly different. 
C) of over-reliance on product marketing. 
D) of collusion among the various sellers. 
E) their demand curves are horizontal. 
A) firms are free to enter and exit. 
B) their products are similar but slightly different. 
C) of over-reliance on product marketing. 
D) of collusion among the various sellers. 
E) their demand curves are horizontal.

Question 20

-Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. Kevin will train how many clients per day?

Accepted Answer

A) 4 
B) 6 
C) 10 
D) between 2 and 4 
E) None of the above answers is correct. 
A) 4 
B) 6 
C) 10 
D) between 2 and 4 
E) None of the above answers is correct.

Firms decide how much to spend on product development and marketing by

The three largest firms in an industry have market shares of 40 percent, 30 percent, and 2 percent. The remaining 47 firms in the industry each have a market share of 1 percent. The Herfindahl-Hirschman Index (HHI)for this industry is ________.

Which of the following is the best example of a differentiated product?

Explain the role of advertising in monopolistic competition. Describe how advertising by all firms in a monopolistically competitive industry impacts a firm's ATC curve, its MC curve, its demand curve, and its MR curve.

What is the legal status of a cartel among firms in the United States?

If one firm in a duopoly increases its production by one unit beyond the monopoly output, that firm's profit , the other firm's profit , and the total profit of the duopoly .

-Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. What price will Kevin charge per session?

All games have which features?

If the four-firm concentration ratio for the market for pizza is 28 percent, then this industry is best characterized as

What three characteristics do all games have in common?

A firm in monopolistic competition makes its decisions on quantity and price by

Monopolistic competition is a market structure in which

If a duopoly has reached the monopoly outcome and only one firm increases its production, that firm's profit and the other firm's profit .

If a monopolistically competitive seller's marginal cost is $3.56, the firm will increase its output if

In a market in which firms operate in monopolistic competition,

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 .

-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 .

In the long run, firms in monopolistic competition earn zero economic profit because

-Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. Kevin will train how many clients per day?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 13: Monopolistic Competition and Oligopoly

Firms decide how much to spend on product development and marketing by

The three largest firms in an industry have market shares of 40 percent, 30 percent, and 2 percent. The remaining 47 firms in the industry each have a market share of 1 percent. The Herfindahl-Hirschman Index (HHI)for this industry is ________.

Which of the following is the best example of a differentiated product?

Explain the role of advertising in monopolistic competition. Describe how advertising by all firms in a monopolistically competitive industry impacts a firm's ATC curve, its MC curve, its demand curve, and its MR curve.

What is the legal status of a cartel among firms in the United States?

If one firm in a duopoly increases its production by one unit beyond the monopoly output, that firm's profit ________, the other firm's profit ________, and the total profit of the duopoly ________.

-Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. What price will Kevin charge per session?

All games have which features?

If the four-firm concentration ratio for the market for pizza is 28 percent, then this industry is best characterized as

What three characteristics do all games have in common?

A firm in monopolistic competition makes its decisions on quantity and price by

Monopolistic competition is a market structure in which

If a duopoly has reached the monopoly outcome and only one firm increases its production, that firm's profit ________ and the other firm's profit ________.

If a monopolistically competitive seller's marginal cost is $3.56, the firm will increase its output if

In a market in which firms operate in monopolistic competition,

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 ________.

In the long run, firms in monopolistic competition earn zero economic profit because

-Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. Kevin will train how many clients per day?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

If one firm in a duopoly increases its production by one unit beyond the monopoly output, that firm's profit , the other firm's profit , and the total profit of the duopoly .

If a duopoly has reached the monopoly outcome and only one firm increases its production, that firm's profit and the other firm's profit .

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 .