Question 1

A dominant strategy is one that

Accepted Answer

A)  yields a position of the winner so long as the other participants act as planned. 
B)  every participant in the game will follow. 
C)  turns a negative-sum game into a positive-sum game. 
D)  always yields the highest benefit regardless of what the other players do. 
A)  yields a position of the winner so long as the other participants act as planned. 
B)  every participant in the game will follow. 
C)  turns a negative-sum game into a positive-sum game. 
D)  always yields the highest benefit regardless of what the other players do. D

Question 2

According to game theorists, a cartel of several firms is an example of a(n)

Accepted Answer

A)  zero-sum game. 
B)  uncooperative game. 
C)  cooperative game. 
D)  noncooperative game. 
A)  zero-sum game. 
B)  uncooperative game. 
C)  cooperative game. 
D)  noncooperative game. C

Question 3

Strategic behavior and game theory are features of which market structure?

Accepted Answer

A)  Perfect competition 
B)  Monopoly 
C)  Monopolistic competition 
D)  Oligopoly 
A)  Perfect competition 
B)  Monopoly 
C)  Monopolistic competition 
D)  Oligopoly D

Question 4

An association of producers that fixes common prices and output quotas is known as a

Accepted Answer

A)  cartel. 
B)  common selling organization. 
C)  joint-marketing arrangement. 
D)  trade association. 
A)  cartel. 
B)  common selling organization. 
C)  joint-marketing arrangement. 
D)  trade association.

Question 5

Suppose a ten firm industry has total sales of $35 million per year. The largest firm have sales of $10 million, the third largest firm has sales of $4 million, and the fourth largest firm has sales of $2 million. If fifth through tenth largest firms combined have annual sales of $12 million, the four-firm concentration ratio for this industry is

Accepted Answer

A)  45.7 percent. 
B)  80 percent. 
C)  65.7 percent. 
D)  none of the above. 
A)  45.7 percent. 
B)  80 percent. 
C)  65.7 percent. 
D)  none of the above.

Question 6

-Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. Which of the following is the outcome with cooperation?

Accepted Answer

A)  Both confess. 
B)  Both don't confess. 
C)  Bob confesses while Harry does not confess. 
D)  Harry confesses while Bo does not confess. 
A)  Both confess. 
B)  Both don't confess. 
C)  Bob confesses while Harry does not confess. 
D)  Harry confesses while Bo does not confess.

Question 7

The recent merger of Southwest Bell (SBC) and AT&T companies is an example of a

Accepted Answer

A)  horizontal merger. 
B)  vertical merger. 
C)  consolidation merger. 
D)  cooperative merger. 
A)  horizontal merger. 
B)  vertical merger. 
C)  consolidation merger. 
D)  cooperative merger.

Question 8

The joining of firms that are producing or selling a similar product is known as

Accepted Answer

A)  a conglomerate merger. 
B)  a horizontal merger. 
C)  a vertical merger. 
D)  economies to scale. 
A)  a conglomerate merger. 
B)  a horizontal merger. 
C)  a vertical merger. 
D)  economies to scale.

Question 9

An example of a positive market feedback is

Accepted Answer

A)  the emergence of the iPod. 
B)  routine maintenance on a car. 
C)  the declining use of land-line telephones for long distance calls. 
D)  the use of telegraph services in the twenty-first century. 
A)  the emergence of the iPod. 
B)  routine maintenance on a car. 
C)  the declining use of land-line telephones for long distance calls. 
D)  the use of telegraph services in the twenty-first century.

Question 10

An association of producers such as OPEC that agrees to set common pricing or output goals is referred to as a

Accepted Answer

A)  cartel. 
B)  conglomerate. 
C)  monopoly. 
D)  partnership. 
A)  cartel. 
B)  conglomerate. 
C)  monopoly. 
D)  partnership.

Question 11

In the mobile device industry, an example of a platform firm is

Accepted Answer

A)  a mobile apps developer. 
B)  a developer of mobile device operation systems. 
C)  a retailer of mobile device accessories. 
D)  an online retailer. 
A)  a mobile apps developer. 
B)  a developer of mobile device operation systems. 
C)  a retailer of mobile device accessories. 
D)  an online retailer.

Question 12

"Oligopoly is the only market structure in which rivalry among firms takes place." Do you agree or disagree? Why?

Accepted Answer

Agree. Oligopolists recognize their stra

Question 13

-Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. Which of the following is the outcome of the dominant strategy without cooperation?

Accepted Answer

A)  Both confess. 
B)  Both don't confess. 
C)  Bob confesses while Harry does not confess. 
D)  Harry confesses while Bo does not confess. 
A)  Both confess. 
B)  Both don't confess. 
C)  Bob confesses while Harry does not confess. 
D)  Harry confesses while Bo does not confess.

Question 14

A member in a cartel can earn more profits by

Accepted Answer

A)  charging a slightly lower price and raising production. 
B)  producing less than the agreed rate. 
C)  selling less than the agreed amount. 
D)  none of the above. 
A)  charging a slightly lower price and raising production. 
B)  producing less than the agreed rate. 
C)  selling less than the agreed amount. 
D)  none of the above.

Question 15

Using the concentration ratio to measure the degree of competition

Accepted Answer

A)  may understate the degree of competition because it ignores imported goods. 
B)  may overstate the degree of competition because it ignores imported goods. 
C)  may overstate the degree of competition because inter-industry competition is ignored. 
D)  may understate the degree of competition because market share changes annually. 
A)  may understate the degree of competition because it ignores imported goods. 
B)  may overstate the degree of competition because it ignores imported goods. 
C)  may overstate the degree of competition because inter-industry competition is ignored. 
D)  may understate the degree of competition because market share changes annually.

Question 16

One of the strongest reasons that oligopolies exist is due to

Accepted Answer

A)  the homogeneity of their products. 
B)  marginal cost pricing. 
C)  lowest cost production. 
D)  economies of scale. 
A)  the homogeneity of their products. 
B)  marginal cost pricing. 
C)  lowest cost production. 
D)  economies of scale.

Question 17

Jane purchases snickle-dees only because her friends do. This is

Accepted Answer

A)  price-leadership. 
B)  negative-sum game. 
C)  positive market feedback. 
D)  negative market feedback. 
A)  price-leadership. 
B)  negative-sum game. 
C)  positive market feedback. 
D)  negative market feedback.

Question 18

Why do firms form a cartel? How do cartels achieve their goals?

Accepted Answer

Firms form a cartel in order t

Question 19

Any rule that is used to make a choice is

Accepted Answer

A)  positive-sum game. 
B)  zero-sum game. 
C)  strategy. 
D)  negative-sum game. 
A)  positive-sum game. 
B)  zero-sum game. 
C)  strategy. 
D)  negative-sum game.

Question 20

In which market structures do firms engage in nonprice competition?

Accepted Answer

A)  Perfect competition and monopolistic competition 
B)  Monopolistic competition and oligopoly 
C)  Oligopoly and monopoly 
D)  Perfect competition and monopoly 
A)  Perfect competition and monopolistic competition 
B)  Monopolistic competition and oligopoly 
C)  Oligopoly and monopoly 
D)  Perfect competition and monopoly

Exam 26: Oligopoly and Strategic Behavior

A dominant strategy is one that

According to game theorists, a cartel of several firms is an example of a(n)

Strategic behavior and game theory are features of which market structure?

An association of producers that fixes common prices and output quotas is known as a

-Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. Which of the following is the outcome with cooperation?

The recent merger of Southwest Bell (SBC) and AT&T companies is an example of a

The joining of firms that are producing or selling a similar product is known as

An example of a positive market feedback is

An association of producers such as OPEC that agrees to set common pricing or output goals is referred to as a

In the mobile device industry, an example of a platform firm is

"Oligopoly is the only market structure in which rivalry among firms takes place." Do you agree or disagree? Why?

-Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. Which of the following is the outcome of the dominant strategy without cooperation?

A member in a cartel can earn more profits by

Using the concentration ratio to measure the degree of competition

One of the strongest reasons that oligopolies exist is due to

Jane purchases snickle-dees only because her friends do. This is

Why do firms form a cartel? How do cartels achieve their goals?

Any rule that is used to make a choice is

In which market structures do firms engage in nonprice competition?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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