Question 1

The restaurant,legal assistance,and clothing industries are each illustrations of:

Accepted Answer

A)  countervailing power. 
B)  homogeneous oligopoly. 
C)  monopolistic competition. 
D)  pure monopoly. 
A)  countervailing power. 
B)  homogeneous oligopoly. 
C)  monopolistic competition. 
D)  pure monopoly.

Question 2

A breakdown in price leadership leading to successive rounds of price cuts is known as:

Accepted Answer

A)  limit pricing. 
B)  a price war. 
C)  informal pricing. 
D)  price discrimination. 
A)  limit pricing. 
B)  a price war. 
C)  informal pricing. 
D)  price discrimination.

Question 3

(Consider This)The prisoner's dilemma reveals that:

Accepted Answer

A)  collusive agreements will always fail. 
B)  the price leadership model does not work. 
C)  nonprice competition is more profitable than price competition. 
D)  sometimes when individuals act independently in their own self-interest,everyone is worse off than if they had cooperated. 
A)  collusive agreements will always fail. 
B)  the price leadership model does not work. 
C)  nonprice competition is more profitable than price competition. 
D)  sometimes when individuals act independently in their own self-interest,everyone is worse off than if they had cooperated.

Question 4

Collusion among firms always involves formal agreements.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the best example of oligopoly?

Accepted Answer

A)  Women's dress manufacturing. 
B)  Automobile manufacturing. 
C)  Restaurants. 
D)  Cotton farming. 
A)  Women's dress manufacturing. 
B)  Automobile manufacturing. 
C)  Restaurants. 
D)  Cotton farming.

Question 6

In the short run,the price charged by a monopolistically competitive firm attempting to maximize profits:

Accepted Answer

A)  must be less than ATC. 
B)  must be more than ATC. 
C)  may be either equal to ATC,less than ATC,or more than ATC. 
D)  must be equal to ATC. 
A)  must be less than ATC. 
B)  must be more than ATC. 
C)  may be either equal to ATC,less than ATC,or more than ATC. 
D)  must be equal to ATC.

Question 7

The term oligopoly indicates:

Accepted Answer

A)  a one-firm industry. 
B)  many producers of a differentiated product. 
C)  a few firms producing either a differentiated or a homogeneous product. 
D)  an industry whose four-firm concentration ratio is low. 
A)  a one-firm industry. 
B)  many producers of a differentiated product. 
C)  a few firms producing either a differentiated or a homogeneous product. 
D)  an industry whose four-firm concentration ratio is low.

Question 8

The kinked-demand curve model helps to explain price rigidity because:

Accepted Answer

A)  there is a gap in the marginal revenue curve within which changes in marginal cost will not affect output or price. 
B)  demand is inelastic above and elastic below the going price. 
C)  the model assumes firms are engaging in some form of collusion. 
D)  the associated marginal revenue curve is perfectly elastic at the going price. 
A)  there is a gap in the marginal revenue curve within which changes in marginal cost will not affect output or price. 
B)  demand is inelastic above and elastic below the going price. 
C)  the model assumes firms are engaging in some form of collusion. 
D)  the associated marginal revenue curve is perfectly elastic at the going price.

Question 9

If you sum the squares of the market shares of each firm in an industry (as measured by percent of industry sales),you are calculating the:

Accepted Answer

A)  four-firm concentration ratio. 
B)  Herfindahl index. 
C)  degree of collusion. 
D)  Lerner index. 
A)  four-firm concentration ratio. 
B)  Herfindahl index. 
C)  degree of collusion. 
D)  Lerner index.

Question 10

If a product such as cement or bricks is costly to ship and,therefore,markets are very localized,the national concentration ratio for that industry:

Accepted Answer

A)  will be greater than 50 percent. 
B)  may understate the degree of monopoly. 
C)  may overstate the degree of monopoly. 
D)  will yield an accurate impression of the degree of monopoly. 
A)  will be greater than 50 percent. 
B)  may understate the degree of monopoly. 
C)  may overstate the degree of monopoly. 
D)  will yield an accurate impression of the degree of monopoly.

Question 11

In an oligopolistic market:

Accepted Answer

A)  one firm is always dominant. 
B)  products may be standardized or differentiated. 
C)  the four largest firms account for 20 percent or less of total sales. 
D)  the industry is monopolistically competitive. 
A)  one firm is always dominant. 
B)  products may be standardized or differentiated. 
C)  the four largest firms account for 20 percent or less of total sales. 
D)  the industry is monopolistically competitive.

Question 12

Zippy's and Tony's are rival pizza restaurants in a small town (together they form a local duopoly).Zippy's management determines that if it increases its advertising expenditures,it will increase profits regardless of whether Tony's increases its advertising budget.Based on this information,we can conclude that:

Accepted Answer

A)  this is a one-time game. 
B)  Zippy's has a dominant strategy in this advertising game. 
C)  this advertising game will reach a Nash equilibrium. 
D)  Zippy's has first-mover advantages in this advertising game. 
A)  this is a one-time game. 
B)  Zippy's has a dominant strategy in this advertising game. 
C)  this advertising game will reach a Nash equilibrium. 
D)  Zippy's has first-mover advantages in this advertising game.

The restaurant,legal assistance,and clothing industries are each illustrations of:

A breakdown in price leadership leading to successive rounds of price cuts is known as:

(Consider This)The prisoner's dilemma reveals that:

Collusion among firms always involves formal agreements.

Which of the following is the best example of oligopoly?

In the short run,the price charged by a monopolistically competitive firm attempting to maximize profits:

The term oligopoly indicates:

The kinked-demand curve model helps to explain price rigidity because:

If you sum the squares of the market shares of each firm in an industry (as measured by percent of industry sales),you are calculating the:

If a product such as cement or bricks is costly to ship and,therefore,markets are very localized,the national concentration ratio for that industry:

In an oligopolistic market:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 13: Monopolistic Competition and Oligopoly

The restaurant,legal assistance,and clothing industries are each illustrations of:

A breakdown in price leadership leading to successive rounds of price cuts is known as:

(Consider This)The prisoner's dilemma reveals that:

Collusion among firms always involves formal agreements.

Which of the following is the best example of oligopoly?

In the short run,the price charged by a monopolistically competitive firm attempting to maximize profits:

The term oligopoly indicates:

The kinked-demand curve model helps to explain price rigidity because:

If you sum the squares of the market shares of each firm in an industry (as measured by percent of industry sales),you are calculating the:

If a product such as cement or bricks is costly to ship and,therefore,markets are very localized,the national concentration ratio for that industry:

In an oligopolistic market:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters