Question 1

Economists use game theory to analyze strategic behavior,which takes into account

Accepted Answer

A)  monopoly situations. 
B)  the expected behavior of others and the recognition of mutual interdependence. 
C)  the price-taking behavior of oligopolists. 
D)  non-price competition. 
E)  that increased demand decreases the market power of the firms in the market. 
A)  monopoly situations. 
B)  the expected behavior of others and the recognition of mutual interdependence. 
C)  the price-taking behavior of oligopolists. 
D)  non-price competition. 
E)  that increased demand decreases the market power of the firms in the market.

Question 2

A cartel is

Accepted Answer

A)  another name for a firm in an oligopoly. 
B)  a collusive agreement among a number of firms. 
C)  a government body that regulates an industry. 
D)  an antitrust law. 
E)  a type of regulation that focuses on quantities rather than price. 
A)  another name for a firm in an oligopoly. 
B)  a collusive agreement among a number of firms. 
C)  a government body that regulates an industry. 
D)  an antitrust law. 
E)  a type of regulation that focuses on quantities rather than price.

Question 3

Game theory is used to analyze the interactions among firms in ________.

Accepted Answer

A)  oligopoly 
B)  perfect competition 
C)  monopoly 
D)  monopolistic competition 
E)  Both answers A and D are correct. 
A)  oligopoly 
B)  perfect competition 
C)  monopoly 
D)  monopolistic competition 
E)  Both answers A and D are correct.

Question 4

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 5

There are two bookstores in a college town.If another bookstore opened,each of the stores would incur an economic loss.This bookstore market is

Accepted Answer

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

Question 6

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly?
i.price discrimination
ii.tying arrangements
iii.exclusive dealing

Accepted Answer

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

Question 7

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

Accepted Answer

No other market structure has the charac

Question 8

-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.If AMD is playing a tit-for-tat strategy,then if Intel conducted R&D last period,AMD

Accepted Answer

A)  definitely conducts R&D this period. 
B)  definitely does not conduct R&D this period. 
C)  might conduct R&D or might not conduct R&D, depending on Intel's profit. 
D)  might conduct R&D or might not conduct R&D, depending on its profit. 
E)  might conduct R&D or might not conduct R&D, but more information is needed to determine its action. 
A)  definitely conducts R&D this period. 
B)  definitely does not conduct R&D this period. 
C)  might conduct R&D or might not conduct R&D, depending on Intel's profit. 
D)  might conduct R&D or might not conduct R&D, depending on its profit. 
E)  might conduct R&D or might not conduct R&D, but more information is needed to determine its action.

Question 9

________ is an agreement between a manufacturer and a distributor on the price at which a product will be resold.

Accepted Answer

A)  Resale price maintenance 
B)  Price discrimination 
C)  Price fixing 
D)  Predatory pricing 
E)  A tying arrangement 
A)  Resale price maintenance 
B)  Price discrimination 
C)  Price fixing 
D)  Predatory pricing 
E)  A tying arrangement

Question 10

-The figure above shows the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly,what is the range of output and prices? Why does this range of outcomes exist?

Accepted Answer

If the firms operate as a monopoly,they

Question 11

Imagine a duopoly in which two firms,A and B,produce the monopoly profit-maximizing output and equally share the economic profit.If firm A increases output,

Accepted Answer

A)  both firms' profits increase. 
B)  firm A's profits increase and firm B's profits decrease. 
C)  firm B's profits increase and firm A's profits decrease. 
D)  both firms' profits decrease. 
E)  firm A's profits increase and firm B's profits do not change. 
A)  both firms' profits increase. 
B)  firm A's profits increase and firm B's profits decrease. 
C)  firm B's profits increase and firm A's profits decrease. 
D)  both firms' profits decrease. 
E)  firm A's profits increase and firm B's profits do not change.

Question 12

A market with only two firms is called a

Accepted Answer

A)  duopoly. 
B)  two-firm monopolistic competition. 
C)  two-firm monopoly. 
D)  cartel. 
E)  two-firm quasi monopoly. 
A)  duopoly. 
B)  two-firm monopolistic competition. 
C)  two-firm monopoly. 
D)  cartel. 
E)  two-firm quasi monopoly.

Question 13

The range of output for a duopoly ranges between the

Accepted Answer

A)  perfectly competitive outcome and the monopolistically competitive outcome. 
B)  efficient scale and the perfectly competitive outcome. 
C)  minimum of ATC and the efficient scale. 
D)  monopoly outcome and the perfectly competitive outcome. 
E)  short-run perfectly competitive outcome and the long-run perfectly competitive outcome. 
A)  perfectly competitive outcome and the monopolistically competitive outcome. 
B)  efficient scale and the perfectly competitive outcome. 
C)  minimum of ATC and the efficient scale. 
D)  monopoly outcome and the perfectly competitive outcome. 
E)  short-run perfectly competitive outcome and the long-run perfectly competitive outcome.

Question 14

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.In the above game,in the Nash equilibrium,

Accepted Answer

A)  Firm A and Firm B are both making $40,000 in economic profit. 
B)  Firm A and Firm B are both making $55,000 in economic profit. 
C)  Firm A is making $60,000 and Firm B is making $55,000 in economic profit. 
D)  Firm A and Firm B are both making $60,000 in economic profit. 
E)  Firm A and Firm B are both making $35,000 in economic profit. 
A)  Firm A and Firm B are both making $40,000 in economic profit. 
B)  Firm A and Firm B are both making $55,000 in economic profit. 
C)  Firm A is making $60,000 and Firm B is making $55,000 in economic profit. 
D)  Firm A and Firm B are both making $60,000 in economic profit. 
E)  Firm A and Firm B are both making $35,000 in economic profit.

Question 15

-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.The numbers are millions of dollars of profit.The Nash equilibrium is for Intel to ________ and for AMD to ________ .

Accepted Answer

A)  conduct R&D; conduct R&D 
B)  conduct R&D; not conduct R&D 
C)  not conduct R&D; conduct R&D 
D)  not conduct R&D; not conduct R&D 
E)  conduct R&D; either conduct R&D or not conduct R&D, the equilibrium could be either choice for AMD 
A)  conduct R&D; conduct R&D 
B)  conduct R&D; not conduct R&D 
C)  not conduct R&D; conduct R&D 
D)  not conduct R&D; not conduct R&D 
E)  conduct R&D; either conduct R&D or not conduct R&D, the equilibrium could be either choice for AMD

Question 16

The Federal Trade Commission uses ________ to help determine whether to challenge a possible merger.

Accepted Answer

A)  the Sherman Act 
B)  the Clayton Act 
C)  the Herfindahl-Hirschman Index 
D)  the antitrust law of natural monopolies 
E)  the four-firm concentration ratio 
A)  the Sherman Act 
B)  the Clayton Act 
C)  the Herfindahl-Hirschman Index 
D)  the antitrust law of natural monopolies 
E)  the four-firm concentration ratio

Question 17

All games have which features?

Accepted Answer

A)  prices, rules, and payoffs 
B)  rules, markets, and prices 
C)  rules, strategies, and payoffs 
D)  rules, strategies, and costs 
E)  equilibrium, prices, and quantities 
A)  prices, rules, and payoffs 
B)  rules, markets, and prices 
C)  rules, strategies, and payoffs 
D)  rules, strategies, and costs 
E)  equilibrium, prices, and quantities

Question 18

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

Accepted Answer

A)  $13 million per plane; $1 million per plane 
B)  $30 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)  $30 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 19

Long-run economic profits are most likely to be earned in

Accepted Answer

A)  perfect competition and oligopoly. 
B)  perfect competition and monopoly. 
C)  monopoly and oligopoly. 
D)  oligopoly and monopolistic competition. 
E)  perfect competition and monopolistic competition. 
A)  perfect competition and oligopoly. 
B)  perfect competition and monopoly. 
C)  monopoly and oligopoly. 
D)  oligopoly and monopolistic competition. 
E)  perfect competition and monopolistic competition.

Question 20

The government believes that which entry barrier has allowed Microsoft to gain monopoly power?

Accepted Answer

A)  ownership of the entire supply of a resource 
B)  patents 
C)  trademarks 
D)  economies of scale and network economies 
E)  territorial confinement 
A)  ownership of the entire supply of a resource 
B)  patents 
C)  trademarks 
D)  economies of scale and network economies 
E)  territorial confinement

Economists use game theory to analyze strategic behavior,which takes into account

A cartel is

Game theory is used to analyze the interactions among firms in ________.

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

There are two bookstores in a college town.If another bookstore opened,each of the stores would incur an economic loss.This bookstore market is

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly? i.price discrimination ii.tying arrangements iii.exclusive dealing

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

-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.If AMD is playing a tit-for-tat strategy,then if Intel conducted R&D last period,AMD

________ is an agreement between a manufacturer and a distributor on the price at which a product will be resold.

-The figure above shows the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly,what is the range of output and prices? Why does this range of outcomes exist?

Imagine a duopoly in which two firms,A and B,produce the monopoly profit-maximizing output and equally share the economic profit.If firm A increases output,

A market with only two firms is called a

The range of output for a duopoly ranges between the

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.In the above game,in the Nash equilibrium,

-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.The numbers are millions of dollars of profit.The Nash equilibrium is for Intel to and for AMD to .

The Federal Trade Commission uses ________ to help determine whether to challenge a possible merger.

All games have which features?

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

Long-run economic profits are most likely to be earned in

The government believes that which entry barrier has allowed Microsoft to gain monopoly power?

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

Economists use game theory to analyze strategic behavior,which takes into account

A cartel is

Game theory is used to analyze the interactions among firms in ________.

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

There are two bookstores in a college town.If another bookstore opened,each of the stores would incur an economic loss.This bookstore market is

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly? i.price discrimination ii.tying arrangements iii.exclusive dealing

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

-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.If AMD is playing a tit-for-tat strategy,then if Intel conducted R&D last period,AMD

________ is an agreement between a manufacturer and a distributor on the price at which a product will be resold.

-The figure above shows the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly,what is the range of output and prices? Why does this range of outcomes exist?

Imagine a duopoly in which two firms,A and B,produce the monopoly profit-maximizing output and equally share the economic profit.If firm A increases output,

A market with only two firms is called a

The range of output for a duopoly ranges between the

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.In the above game,in the Nash equilibrium,

-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.The numbers are millions of dollars of profit.The Nash equilibrium is for Intel to ________ and for AMD to ________ .

The Federal Trade Commission uses ________ to help determine whether to challenge a possible merger.

All games have which features?

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

Long-run economic profits are most likely to be earned in

The government believes that which entry barrier has allowed Microsoft to gain monopoly power?

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

-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.The numbers are millions of dollars of profit.The Nash equilibrium is for Intel to and for AMD to .

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