Question 1

A fundamental assumption in game theory is that players do not interact with each other.

Accepted Answer

A) True 
 B)False

Question 2

-Refer to Table 11-1. Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $60 00 and Star Connections earns a profit of $12 000. Is there an incentive for any one firm to increase its advertising budget?

Accepted Answer

A)  No, neither firm has an incentive to raise its advertising spending. 
B)  Yes, both firms have an incentive to raise their advertising budgets. 
C)  Yes, Star Connections has an incentive to increase its advertising budget, but Godrickporter does not. 
D)  Yes, Godrickporter has an incentive to increase its advertising budget, but Star Connections does not. 
A)  No, neither firm has an incentive to raise its advertising spending. 
B)  Yes, both firms have an incentive to raise their advertising budgets. 
C)  Yes, Star Connections has an incentive to increase its advertising budget, but Godrickporter does not. 
D)  Yes, Godrickporter has an incentive to increase its advertising budget, but Star Connections does not.

Question 3

Economies of scale will create a barrier to entry in an oligopoly industry when

Accepted Answer

A)  a firm's minimum efficient scale occurs where long-run average total costs are constant. 
B)  the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a large fraction of total industry sales. 
C)  the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a small fraction of total industry sales. 
D)  the industry's four-firm concentration ratio is less than 40 per cent. 
A)  a firm's minimum efficient scale occurs where long-run average total costs are constant. 
B)  the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a large fraction of total industry sales. 
C)  the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a small fraction of total industry sales. 
D)  the industry's four-firm concentration ratio is less than 40 per cent.

Question 4

Which of the following statements is generally true?

Accepted Answer

A)  The larger the number of firms in an industry, the less rivalry there is. 
B)  The smaller the number of firms in an industry, the greater the rivalry. 
C)  The larger the number of firms in an industry, the greater the rivalry. 
D)  The degree of rivalry in an industry is largely independent of the number of firms. 
A)  The larger the number of firms in an industry, the less rivalry there is. 
B)  The smaller the number of firms in an industry, the greater the rivalry. 
C)  The larger the number of firms in an industry, the greater the rivalry. 
D)  The degree of rivalry in an industry is largely independent of the number of firms.

Question 5

-Refer to Table 11-3. Does Alistair have a dominant strategy and, if so, what is it?

Accepted Answer

A)  Yes, Alistair should increase its advertising budget. 
B)  Yes, Alistair should keep its advertising budget as is. 
C)  There are two dominant strategies: if Baine increases its advertising budget, then Alistair's best bet is to keep its budget the same, but if Baine does not increase its spending, then Alistair should raise its advertising budget. 
D)  No, there is no dominant strategy. 
A)  Yes, Alistair should increase its advertising budget. 
B)  Yes, Alistair should keep its advertising budget as is. 
C)  There are two dominant strategies: if Baine increases its advertising budget, then Alistair's best bet is to keep its budget the same, but if Baine does not increase its spending, then Alistair should raise its advertising budget. 
D)  No, there is no dominant strategy.

Question 6

Why do economists refer to the pricing strategies of oligopoly firms as a prisoner's dilemma game?

Accepted Answer

will leave firms wor

A fundamental assumption in game theory is that players do not interact with each other.

-Refer to Table 11-1. Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $60 00 and Star Connections earns a profit of $12 000. Is there an incentive for any one firm to increase its advertising budget?

Economies of scale will create a barrier to entry in an oligopoly industry when

Which of the following statements is generally true?

-Refer to Table 11-3. Does Alistair have a dominant strategy and, if so, what is it?

Why do economists refer to the pricing strategies of oligopoly firms as a prisoner's dilemma game?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 11: Oligopoly : Firms in Less Competitve Markets

A fundamental assumption in game theory is that players do not interact with each other.

-Refer to Table 11-1. Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $60 00 and Star Connections earns a profit of $12 000. Is there an incentive for any one firm to increase its advertising budget?

Economies of scale will create a barrier to entry in an oligopoly industry when

Which of the following statements is generally true?

-Refer to Table 11-3. Does Alistair have a dominant strategy and, if so, what is it?

Why do economists refer to the pricing strategies of oligopoly firms as a prisoner's dilemma game?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters