Question 1

In a cartel,how does the number of firms affect the likelihood that the cartel will be able to successfully maintain a high price?

Accepted Answer

The more firms that are involved in the

Question 2

Collusion results when a group of firms
i.act separately to limit output,lower prices,and decrease economic profits.
ii.act together to limit output,raise prices,and increase economic profits.
iii.in the United States legally fix prices.

Accepted Answer

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

Question 3

The figure above shows the market for airplanes.
-Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be ________ and if the firms act as competitors the price will be ________.

Accepted Answer

A)  $13 million per plane; $1 million per plane 
B)  $1 million per plane; $13 million per plane 
C)  $13 million per plane; $13 million per plane 
D)  $1 million per plane; $1 million per plane 
E)  None of the above answers is correct. 
A)  $13 million per plane; $1 million per plane 
B)  $1 million per plane; $13 million per plane 
C)  $13 million per plane; $13 million per plane 
D)  $1 million per plane; $1 million per plane 
E)  None of the above answers is correct.

Question 4

Resale price maintenance is efficient if

Accepted Answer

A)  it is used in conjunction with a tying arrangement. 
B)  the manufacturer does not engage in predatory pricing. 
C)  retailers charge the lowest price for the product. 
D)  it enables a manufacturer to induce an efficient standard of service from retailers. 
E)  it takes the place of an exclusive deal. 
A)  it is used in conjunction with a tying arrangement. 
B)  the manufacturer does not engage in predatory pricing. 
C)  retailers charge the lowest price for the product. 
D)  it enables a manufacturer to induce an efficient standard of service from retailers. 
E)  it takes the place of an exclusive deal.

Question 5

If an industry has an HHI of 2,500,the market structure is that of

Accepted Answer

A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  either monopoly or perfect competition, depending on the existence or absence of barriers to entry. 
A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  either monopoly or perfect competition, depending on the existence or absence of barriers to entry.

Question 6

The very best joint outcome possible for the firms in a duopoly is to produce the

Accepted Answer

A)  monopoly level of output. 
B)  perfectly competitive level of output. 
C)  amount of output that maximizes total revenue. 
D)  amount of output that minimizes total cost. 
E)  Nash equilibrium level of output if the game is not repeated. 
A)  monopoly level of output. 
B)  perfectly competitive level of output. 
C)  amount of output that maximizes total revenue. 
D)  amount of output that minimizes total cost. 
E)  Nash equilibrium level of output if the game is not repeated.

Question 7

A firm faces a small number of competitors.This firm is competing in

Accepted Answer

A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  a perfect multi-firm monopoly. 
A)  a monopoly. 
B)  monopolistic competition. 
C)  an oligopoly. 
D)  perfect competition. 
E)  a perfect multi-firm monopoly.

Question 8

In a market with a Herfindahl-Hirschman Index of 2,000,according to their guidelines,will the Department of Justice challenge a merger that would increase the index by 50?

Accepted Answer

Yes,according to their guideli

Question 9

The tool that economists use to analyze the mutual interdependence of oligopolies is

Accepted Answer

A)  economies of scale. 
B)  the four-firm concentration ratio. 
C)  game theory. 
D)  the HHI. 
E)  the efficient scale. 
A)  economies of scale. 
B)  the four-firm concentration ratio. 
C)  game theory. 
D)  the HHI. 
E)  the efficient scale.

Question 10

Oligopoly is

Accepted Answer

A)  always efficient. 
B)  efficient only if the firms cooperate. 
C)  efficient only if the firms play non-repeated games. 
D)  generally not efficient. 
E)  efficient only if the firms innovate. 
A)  always efficient. 
B)  efficient only if the firms cooperate. 
C)  efficient only if the firms play non-repeated games. 
D)  generally not efficient. 
E)  efficient only if the firms innovate.

Question 11

What is meant by the term "exclusive dealing"? Give an example of an exclusive deal.When is it illegal?

Accepted Answer

Exclusive dealing is a contract that pre

Question 12

The efficient scale of one firm is 20 units and the average total cost at the efficient scale is $30.The quantity demanded in the market as a whole at $30 is 40 units.This market is

Accepted Answer

A)  a natural duopoly. 
B)  a legal duopoly. 
C)  a natural monopoly. 
D)  a legal monopoly. 
E)  monopolistically competitive. 
A)  a natural duopoly. 
B)  a legal duopoly. 
C)  a natural monopoly. 
D)  a legal monopoly. 
E)  monopolistically competitive.

Question 13

A group of firms that has entered into an agreement to restrict output and increase prices and profits is called

Accepted Answer

A)  a compliance. 
B)  a cartel. 
C)  an oligopoly. 
D)  a duopoly. 
E)  a multi-firm monopoly. 
A)  a compliance. 
B)  a cartel. 
C)  an oligopoly. 
D)  a duopoly. 
E)  a multi-firm monopoly.

Question 14

The figure above shows the market for airplanes.
-Suppose the airplane market is an oligopoly.According to the figure above,the quantity produced can range as high as ________ planes per week and as low as ________ planes per week.

Accepted Answer

A)  10; 4 
B)  12; 6 
C)  6; 0 
D)  12; 0 
E)  None of the above answers is correct. 
A)  10; 4 
B)  12; 6 
C)  6; 0 
D)  12; 0 
E)  None of the above answers is correct.

Question 15

-The figure above shows the market demand curve and the ATC curve for a firm.Each firm in the market has the same ATC curve.If the firms in the industry agree to form a cartel,the firms in the industry make an economic profit if there are ________ firms,each producing ________ units per hour.

Accepted Answer

A)  3; 4,000 
B)  4; 3,000 
C)  2; 6,000 
D)  2; 4,000 
E)  2; 12,000 
A)  3; 4,000 
B)  4; 3,000 
C)  2; 6,000 
D)  2; 4,000 
E)  2; 12,000

Question 16

Describe the Department of Justice's claims against Microsoft.

Accepted Answer

The Department of Justice claims that Mi

Question 17

One of the main tools economists use to analyze strategic behavior is

Accepted Answer

A)  the Herfindahl-Hirschman Index. 
B)  game theory. 
C)  cartel theory. 
D)  the collusion index. 
E)  dual theory, which is used to study duopolies. 
A)  the Herfindahl-Hirschman Index. 
B)  game theory. 
C)  cartel theory. 
D)  the collusion index. 
E)  dual theory, which is used to study duopolies.

Question 18

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone ________ its price and ________ its production.

Accepted Answer

A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases 
E)  raises; does not change 
A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases 
E)  raises; does not change

Question 19

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,then ________ limit(s)the market to 3 firms.

Accepted Answer

A)  economies of scale 
B)  a "tit for tat" strategy 
C)  collusion 
D)  a Nash equilibrium 
E)  legal requirements 
A)  economies of scale 
B)  a "tit for tat" strategy 
C)  collusion 
D)  a Nash equilibrium 
E)  legal requirements

Question 20

Tying arrangements

Accepted Answer

A)  require retailers to charge a specific price determined by the manufacturer. 
B)  require a buyer to purchase one product in order to buy another, different product. 
C)  are illegal under the Sherman Act. 
D)  always allow a firm to increase its market power. 
E)  are always illegal under the Clayton Act. 
A)  require retailers to charge a specific price determined by the manufacturer. 
B)  require a buyer to purchase one product in order to buy another, different product. 
C)  are illegal under the Sherman Act. 
D)  always allow a firm to increase its market power. 
E)  are always illegal under the Clayton Act.

In a cartel,how does the number of firms affect the likelihood that the cartel will be able to successfully maintain a high price?

Collusion results when a group of firms i.act separately to limit output,lower prices,and decrease economic profits. ii.act together to limit output,raise prices,and increase economic profits. iii.in the United States legally fix prices.

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be and if the firms act as competitors the price will be .

Resale price maintenance is efficient if

If an industry has an HHI of 2,500,the market structure is that of

The very best joint outcome possible for the firms in a duopoly is to produce the

A firm faces a small number of competitors.This firm is competing in

In a market with a Herfindahl-Hirschman Index of 2,000,according to their guidelines,will the Department of Justice challenge a merger that would increase the index by 50?

The tool that economists use to analyze the mutual interdependence of oligopolies is

Oligopoly is

What is meant by the term "exclusive dealing"? Give an example of an exclusive deal.When is it illegal?

The efficient scale of one firm is 20 units and the average total cost at the efficient scale is $30.The quantity demanded in the market as a whole at $30 is 40 units.This market is

A group of firms that has entered into an agreement to restrict output and increase prices and profits is called

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.According to the figure above,the quantity produced can range as high as planes per week and as low as planes per week.

-The figure above shows the market demand curve and the ATC curve for a firm.Each firm in the market has the same ATC curve.If the firms in the industry agree to form a cartel,the firms in the industry make an economic profit if there are firms,each producing units per hour.

Describe the Department of Justice's claims against Microsoft.

One of the main tools economists use to analyze strategic behavior is

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone its price and its production.

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,then ________ limit(s)the market to 3 firms.

Tying arrangements

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

In a cartel,how does the number of firms affect the likelihood that the cartel will be able to successfully maintain a high price?

Collusion results when a group of firms i.act separately to limit output,lower prices,and decrease economic profits. ii.act together to limit output,raise prices,and increase economic profits. iii.in the United States legally fix prices.

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be ________ and if the firms act as competitors the price will be ________.

Resale price maintenance is efficient if

If an industry has an HHI of 2,500,the market structure is that of

The very best joint outcome possible for the firms in a duopoly is to produce the

A firm faces a small number of competitors.This firm is competing in

In a market with a Herfindahl-Hirschman Index of 2,000,according to their guidelines,will the Department of Justice challenge a merger that would increase the index by 50?

The tool that economists use to analyze the mutual interdependence of oligopolies is

Oligopoly is

What is meant by the term "exclusive dealing"? Give an example of an exclusive deal.When is it illegal?

The efficient scale of one firm is 20 units and the average total cost at the efficient scale is $30.The quantity demanded in the market as a whole at $30 is 40 units.This market is

A group of firms that has entered into an agreement to restrict output and increase prices and profits is called

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.According to the figure above,the quantity produced can range as high as ________ planes per week and as low as ________ planes per week.

-The figure above shows the market demand curve and the ATC curve for a firm.Each firm in the market has the same ATC curve.If the firms in the industry agree to form a cartel,the firms in the industry make an economic profit if there are ________ firms,each producing ________ units per hour.

Describe the Department of Justice's claims against Microsoft.

One of the main tools economists use to analyze strategic behavior is

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone ________ its price and ________ its production.

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,then ________ limit(s)the market to 3 firms.

Tying arrangements

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 figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.If the firms act as a monopolist,the price will be and if the firms act as competitors the price will be .

The figure above shows the market for airplanes. -Suppose the airplane market is an oligopoly.According to the figure above,the quantity produced can range as high as planes per week and as low as planes per week.

-The figure above shows the market demand curve and the ATC curve for a firm.Each firm in the market has the same ATC curve.If the firms in the industry agree to form a cartel,the firms in the industry make an economic profit if there are firms,each producing units per hour.

If a duopoly has reached the monopoly outcome,a firm can increase its profit by if it and it alone its price and its production.