Question 1

What is the difference between explicit collusion and implicit collusion?

Accepted Answer

Explicit collusion involves ma

Question 2

A market comprised of only two firms is called a

Accepted Answer

A)  competitive market. 
B)  duopoly. 
C)  monopoly. 
D)  monopolistically competitive market. 
A)  competitive market. 
B)  duopoly. 
C)  monopoly. 
D)  monopolistically competitive market.

Question 3

-Refer to Figure 11-2. If the government delays Gigacom's entry and Xenophone moves first, what is the likely outcome in the market?

Accepted Answer

A)  Both offer Internet service via cable line; Xenophone earns a profit of $6 million and Gigacom earns a profit of $9 million. 
B)  Both offer DSL Internet service; Xenophone earns a profit of $8 million and Gigacom earns a profit of $7 million. 
C)  Xenophone offers DSL Internet service and earns a profit of $5 million, while Gigacom offers Internet service via cable line and earns a profit of $6.5 million. 
D)  Xenophone offers Internet service via cable line and earns a profit of $4 million, while Gigacom offers DSL Internet service and earns a profit of $4.5 million. 
A)  Both offer Internet service via cable line; Xenophone earns a profit of $6 million and Gigacom earns a profit of $9 million. 
B)  Both offer DSL Internet service; Xenophone earns a profit of $8 million and Gigacom earns a profit of $7 million. 
C)  Xenophone offers DSL Internet service and earns a profit of $5 million, while Gigacom offers Internet service via cable line and earns a profit of $6.5 million. 
D)  Xenophone offers Internet service via cable line and earns a profit of $4 million, while Gigacom offers DSL Internet service and earns a profit of $4.5 million.

Question 4

Which of the following economists did not help to develop game theory analysis?

Accepted Answer

A)  Adam Smith 
B)  John Nash 
C)  John von Neumann 
D)  Oskar Morgenstern 
A)  Adam Smith 
B)  John Nash 
C)  John von Neumann 
D)  Oskar Morgenstern

Question 5

What is the prisoners' dilemma?

Accepted Answer

A)  a game that involves no dominant strategies 
B)  a game in which prisoners are stumped because they cannot communicate with each other 
C)  a game in which players act in rational, self-interested ways that leave everyone worse off 
D)  a game in which players collude to outfox authorities 
A)  a game that involves no dominant strategies 
B)  a game in which prisoners are stumped because they cannot communicate with each other 
C)  a game in which players act in rational, self-interested ways that leave everyone worse off 
D)  a game in which players collude to outfox authorities

Question 6

What is the dominant strategy in a second-price auction?

Accepted Answer

A)  bidding below one's true value 
B)  bidding above one's true value 
C)  bidding one's true value 
D)  There is no dominant strategy. 
A)  bidding below one's true value 
B)  bidding above one's true value 
C)  bidding one's true value 
D)  There is no dominant strategy.

Question 7

The bargaining power of buyers increases if

Accepted Answer

A)  there are many large buyers. 
B)  the input in question has few substitutes. 
C)  the input in question is not a critical component of production. 
D)  there are wide variations in the quality of inputs from supplier to supplier. 
A)  there are many large buyers. 
B)  the input in question has few substitutes. 
C)  the input in question is not a critical component of production. 
D)  there are wide variations in the quality of inputs from supplier to supplier.

Question 8

Which of the following is not among Porter's competitive forces?

Accepted Answer

A)  power of buyers 
B)  power of suppliers 
C)  threat of new entrants 
D)  changing consumer tastes 
A)  power of buyers 
B)  power of suppliers 
C)  threat of new entrants 
D)  changing consumer tastes

Question 9

Who won a Nobel Prize in economics for his work in the development of game theory?

Accepted Answer

A)  John von Neuman 
B)  Oskar Morgenstern 
C)  John Nash 
D)  Howard Schultz 
A)  John von Neuman 
B)  Oskar Morgenstern 
C)  John Nash 
D)  Howard Schultz

Question 10

A subgame-perfect equilibrium is a Nash equilibrium in which no player can make himself better off by changing his decision at any decision node.

Accepted Answer

A) True 
 B)False

Question 11

What is a sequential game? How are decision trees used to analyse sequential games?

Accepted Answer

will respond to thei

Question 12

An example of a barrier to entry is

Accepted Answer

A)  product differentiation. 
B)  high profits. 
C)  superior technological knowledge. 
D)  increasing marginal costs 
A)  product differentiation. 
B)  high profits. 
C)  superior technological knowledge. 
D)  increasing marginal costs

Question 13

What is meant by the term 'government-imposed barrier to entry'? Why would a government be willing to impose barriers to entering an industry?

Accepted Answer

Government imposed barriers to entry are

Question 14

In an oligopoly, minimum efficient scale is likely to occur at a level of output that is a large fraction of industry sales.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are ways by which existing firms can deter the entry of new firms into an industry except

Accepted Answer

A)  continuously producing new and improved products. 
B)  earning less than maximum profit. 
C)  advertising products aggressively. 
D)  threatening to raise prices. 
A)  continuously producing new and improved products. 
B)  earning less than maximum profit. 
C)  advertising products aggressively. 
D)  threatening to raise prices.

Question 16

In a subgame perfect equilibrium,

Accepted Answer

A)  the first mover has an advantage over other players. 
B)  the last mover has an advantage over other players. 
C)  each player's strategy constitutes a Nash equilibrium at every subgame of the original game. 
D)  each player has the same response as the others at every subgame of the tree. 
A)  the first mover has an advantage over other players. 
B)  the last mover has an advantage over other players. 
C)  each player's strategy constitutes a Nash equilibrium at every subgame of the original game. 
D)  each player has the same response as the others at every subgame of the tree.

Question 17

If economies of scale are significant, the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales.

Accepted Answer

A) True 
 B)False

Question 18

Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games.

Accepted Answer

A) True 
 B)False

Question 19

-Refer to Table 11-2. Which of the following statements is true?

Accepted Answer

A)  The Nash equilibrium is a noncooperative, dominant strategy equilibrium. 
B)  The Nash equilibrium is a cooperative equilibrium. 
C)  The Nash equilibrium is a collusive equilibrium. 
D)  There is no Nash equilibrium in this game because each party pursues its dominant strategy. 
A)  The Nash equilibrium is a noncooperative, dominant strategy equilibrium. 
B)  The Nash equilibrium is a cooperative equilibrium. 
C)  The Nash equilibrium is a collusive equilibrium. 
D)  There is no Nash equilibrium in this game because each party pursues its dominant strategy.

Question 20

If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits.

Accepted Answer

A) True 
 B)False

What is the difference between explicit collusion and implicit collusion?

A market comprised of only two firms is called a

-Refer to Figure 11-2. If the government delays Gigacom's entry and Xenophone moves first, what is the likely outcome in the market?

Which of the following economists did not help to develop game theory analysis?

What is the prisoners' dilemma?

What is the dominant strategy in a second-price auction?

The bargaining power of buyers increases if

Which of the following is not among Porter's competitive forces?

Who won a Nobel Prize in economics for his work in the development of game theory?

A subgame-perfect equilibrium is a Nash equilibrium in which no player can make himself better off by changing his decision at any decision node.

What is a sequential game? How are decision trees used to analyse sequential games?

An example of a barrier to entry is

What is meant by the term 'government-imposed barrier to entry'? Why would a government be willing to impose barriers to entering an industry?

In an oligopoly, minimum efficient scale is likely to occur at a level of output that is a large fraction of industry sales.

All of the following are ways by which existing firms can deter the entry of new firms into an industry except

In a subgame perfect equilibrium,

If economies of scale are significant, the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales.

Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games.

-Refer to Table 11-2. Which of the following statements is true?

If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits.

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

What is the difference between explicit collusion and implicit collusion?

A market comprised of only two firms is called a

-Refer to Figure 11-2. If the government delays Gigacom's entry and Xenophone moves first, what is the likely outcome in the market?

Which of the following economists did not help to develop game theory analysis?

What is the prisoners' dilemma?

What is the dominant strategy in a second-price auction?

The bargaining power of buyers increases if

Which of the following is not among Porter's competitive forces?

Who won a Nobel Prize in economics for his work in the development of game theory?

A subgame-perfect equilibrium is a Nash equilibrium in which no player can make himself better off by changing his decision at any decision node.

What is a sequential game? How are decision trees used to analyse sequential games?

An example of a barrier to entry is

What is meant by the term 'government-imposed barrier to entry'? Why would a government be willing to impose barriers to entering an industry?

In an oligopoly, minimum efficient scale is likely to occur at a level of output that is a large fraction of industry sales.

All of the following are ways by which existing firms can deter the entry of new firms into an industry except

In a subgame perfect equilibrium,

If economies of scale are significant, the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales.

Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games.

-Refer to Table 11-2. Which of the following statements is true?

If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits.

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