Question 1

A two-firm oligopoly is called a

Accepted Answer

A)  double monopoly. 
B)  cartel. 
C)  duopoly. 
D)  monopolistic oligopoly. 
E)  dual-market. 
A)  double monopoly. 
B)  cartel. 
C)  duopoly. 
D)  monopolistic oligopoly. 
E)  dual-market.

Question 2

Does section 2 of the Sherman Act make it a felony to "attempt" to monopolize an industry,or must the attempt succeed before it is a felony?

Accepted Answer

Section 2 of the Sherman Act m

Question 3

When economies of scale limit the number of firms in an industry to 3,there is a

Accepted Answer

A)  natural monopoly. 
B)  natural oligopoly. 
C)  legal oligopoly. 
D)  legal cartel. 
E)  natural monopolistic competition. 
A)  natural monopoly. 
B)  natural oligopoly. 
C)  legal oligopoly. 
D)  legal cartel. 
E)  natural monopolistic competition.

Question 4

The cell-phone market can be considered a(n)________ because ________.

Accepted Answer

A)  oligopoly; there are large profits for the firms that dominate the market 
B)  monopoly; Apple makes the largest profit in the market 
C)  monopolistically competitive market; the few firms make a profit and produce a variety of phones 
D)  oligopoly; there are few barriers to entry 
E)  monopolistically competitive market; the firms charge a markup over marginal cost 
A)  oligopoly; there are large profits for the firms that dominate the market 
B)  monopoly; Apple makes the largest profit in the market 
C)  monopolistically competitive market; the few firms make a profit and produce a variety of phones 
D)  oligopoly; there are few barriers to entry 
E)  monopolistically competitive market; the firms charge a markup over marginal cost

Question 5

The U.S.courts found Microsoft

Accepted Answer

A)  did not violate antitrust law. 
B)  violated the Sherman Act. 
C)  violated the Cellar-Kefauver Act. 
D)  engaged in predatory pricing. 
E)  violated the price discrimination clause of the Clayton Act. 
A)  did not violate antitrust law. 
B)  violated the Sherman Act. 
C)  violated the Cellar-Kefauver Act. 
D)  engaged in predatory pricing. 
E)  violated the price discrimination clause of the Clayton Act.

Question 6

The equilibrium in the prisoners' dilemma
i.minimizes the prisoners' combined jail time.
ii.has one prisoner confessing and the other denying.
iii.is a Nash equilibrium.

Accepted Answer

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

Question 7

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 8

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where

Accepted Answer

A)  P = MC. 
B)  MR = MC. 
C)  P < ATC. 
D)  P = MR. 
E)  MC = ATC. 
A)  P = MC. 
B)  MR = MC. 
C)  P < ATC. 
D)  P = MR. 
E)  MC = ATC.

Question 9

A Nash equilibrium
i.is named after the Nobel prize winning economist,John Nash.
ii.occurs when each player chooses the best strategy given the strategy of the other player.
iii.must give the best possible outcome for both players.

Accepted Answer

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

Question 10

-Intel and AMD are a duopoly that produces CPU chips.Intel and AMD can conduct R&D or they cannot conduct R&D.The table above shows the payoff matrix for the two firms.AMD is playing a tit-for-tat strategy and Intel did not conduct R&D last period.Then,of the following answers,Intel's total profit for the next two periods is the highest if Intel ________ R&D this period and ________ R&D next period.

Accepted Answer

A)  conducts; conducts 
B)  does not conduct; conducts 
C)  conducts; does not conduct 
D)  does not conduct; does not conduct 
E)  conducts; either conducts or does not conduct because the profit is the same in either case 
A)  conducts; conducts 
B)  does not conduct; conducts 
C)  conducts; does not conduct 
D)  does not conduct; does not conduct 
E)  conducts; either conducts or does not conduct because the profit is the same in either case

Question 11

Game theory reveals that

Accepted Answer

A)  the equilibrium might not be the best solution for the parties involved. 
B)  firms in oligopoly are not interdependent. 
C)  each player looks after what is best for the industry. 
D)  if all firms in an oligopoly take the action that maximizes their profit, then the equilibrium will have the largest possible combined profit of all the firms. 
E)  firms in an oligopoly choose their actions without regard for what the other firms might do. 
A)  the equilibrium might not be the best solution for the parties involved. 
B)  firms in oligopoly are not interdependent. 
C)  each player looks after what is best for the industry. 
D)  if all firms in an oligopoly take the action that maximizes their profit, then the equilibrium will have the largest possible combined profit of all the firms. 
E)  firms in an oligopoly choose their actions without regard for what the other firms might do.

Question 12

In the 1970s,when a gasoline price ceiling was imposed that was below the equilibrium price of gasoline,some gas stations required that buyers of gas also purchase other products sold at the station.This policy is an example of which of the following?

Accepted Answer

A)  price discrimination 
B)  tying arrangements 
C)  exclusive dealing 
D)  requirements contract 
E)  resale price maintenance 
A)  price discrimination 
B)  tying arrangements 
C)  exclusive dealing 
D)  requirements contract 
E)  resale price maintenance

Question 13

What is a Nash equilibrium? Is this equilibrium the best outcome for the players? Give an example.

Accepted Answer

John Nash proposed the concept of an equ

Question 14

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

Accepted Answer

A)  if the price rise was not predatory 
B)  if the price rise did not measurably increase producer surplus 
C)  never 
D)  if the price rise did not harm consumers in the long run by reducing competition 
E)  if the price rise was necessary to keep one or both bakeries from closing. 
A)  if the price rise was not predatory 
B)  if the price rise did not measurably increase producer surplus 
C)  never 
D)  if the price rise did not harm consumers in the long run by reducing competition 
E)  if the price rise was necessary to keep one or both bakeries from closing.

Question 15

To determine if a market is an oligopoly,we need to determine if

Accepted Answer

A)  the market's HHI is less than 900. 
B)  there are many firms in the market. 
C)  the firms are so few that they recognize their mutual interdependencies. 
D)  the firms make identical or differentiated products. 
E)  cartels are legal in their market. 
A)  the market's HHI is less than 900. 
B)  there are many firms in the market. 
C)  the firms are so few that they recognize their mutual interdependencies. 
D)  the firms make identical or differentiated products. 
E)  cartels are legal in their market.

Question 16

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit ________ and the first 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 17

The Clayton Act

Accepted Answer

A)  replaced the Sherman Act. 
B)  along with its amendments, outlawed several business practices if they substantially lessened competition or created monopoly. 
C)  along with its amendments, prohibited all business practices that substantially lessen competition or create monopoly. 
D)  was the first anti-trust law in the United States. 
E)  was repealed in 1985. 
A)  replaced the Sherman Act. 
B)  along with its amendments, outlawed several business practices if they substantially lessened competition or created monopoly. 
C)  along with its amendments, prohibited all business practices that substantially lessen competition or create monopoly. 
D)  was the first anti-trust law in the United States. 
E)  was repealed in 1985.

Question 18

The prisoners' dilemma is

Accepted Answer

A)  an example of a duopoly game. 
B)  a theory about why firms break the law. 
C)  competition that can occur among firms in monopolistic competition. 
D)  an example of the monopolist charging high prices. 
E)  an example of a game that does not have a Nash equilibrium. 
A)  an example of a duopoly game. 
B)  a theory about why firms break the law. 
C)  competition that can occur among firms in monopolistic competition. 
D)  an example of the monopolist charging high prices. 
E)  an example of a game that does not have a Nash equilibrium.

Question 19

If price fixing is necessary because without it a firm will go bankrupt,is the price fixing legal?

Accepted Answer

No,price fixing is always ille

Question 20

"The Clayton Act repealed the Sherman Act so that only the Clayton Act remains in force." Is the previous statement correct or incorrect?

Accepted Answer

The statement is inc

A two-firm oligopoly is called a

Does section 2 of the Sherman Act make it a felony to "attempt" to monopolize an industry,or must the attempt succeed before it is a felony?

When economies of scale limit the number of firms in an industry to 3,there is a

The cell-phone market can be considered a(n) because .

The U.S.courts found Microsoft

The equilibrium in the prisoners' dilemma i.minimizes the prisoners' combined jail time. ii.has one prisoner confessing and the other denying. iii.is a Nash equilibrium.

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 .

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where

A Nash equilibrium i.is named after the Nobel prize winning economist,John Nash. ii.occurs when each player chooses the best strategy given the strategy of the other player. iii.must give the best possible outcome for both players.

Game theory reveals that

In the 1970s,when a gasoline price ceiling was imposed that was below the equilibrium price of gasoline,some gas stations required that buyers of gas also purchase other products sold at the station.This policy is an example of which of the following?

What is a Nash equilibrium? Is this equilibrium the best outcome for the players? Give an example.

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

To determine if a market is an oligopoly,we need to determine if

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit and the first firm's profit .

The Clayton Act

The prisoners' dilemma is

If price fixing is necessary because without it a firm will go bankrupt,is the price fixing legal?

"The Clayton Act repealed the Sherman Act so that only the Clayton Act remains in force." Is the previous statement correct or incorrect?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

Exam 18: Oligopoly

A two-firm oligopoly is called a

Does section 2 of the Sherman Act make it a felony to "attempt" to monopolize an industry,or must the attempt succeed before it is a felony?

When economies of scale limit the number of firms in an industry to 3,there is a

The cell-phone market can be considered a(n)________ because ________.

The U.S.courts found Microsoft

The equilibrium in the prisoners' dilemma i.minimizes the prisoners' combined jail time. ii.has one prisoner confessing and the other denying. iii.is a Nash equilibrium.

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 ________.

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where

A Nash equilibrium i.is named after the Nobel prize winning economist,John Nash. ii.occurs when each player chooses the best strategy given the strategy of the other player. iii.must give the best possible outcome for both players.

Game theory reveals that

In the 1970s,when a gasoline price ceiling was imposed that was below the equilibrium price of gasoline,some gas stations required that buyers of gas also purchase other products sold at the station.This policy is an example of which of the following?

What is a Nash equilibrium? Is this equilibrium the best outcome for the players? Give an example.

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

To determine if a market is an oligopoly,we need to determine if

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit ________ and the first firm's profit ________.

The Clayton Act

The prisoners' dilemma is

If price fixing is necessary because without it a firm will go bankrupt,is the price fixing legal?

"The Clayton Act repealed the Sherman Act so that only the Clayton Act remains in force." Is the previous statement correct or incorrect?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

The cell-phone market can be considered a(n) because .

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 .

Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production.If the second firm next increases its production,the second firm's profit and the first firm's profit .