Question 1

If an industry evolves from monopolistic competition to oligopoly, we would expect

Accepted Answer

A)   the four-firm concentration ratio to decrease.
B)   the four-firm concentration ratio to increase.
C)   the four-firm concentration ratio to remain the same.
D)   barriers to entry to weaken.E) C) and D)
F) A) and C)

Question 2

Clear-cut mutual interdependence with respect to the price-output policies exists in

Accepted Answer

A)   pure monopoly.
B)   oligopoly.
C)   monopolistic competition.
D)   pure competition.E) None of the above
F) A) and B)

Question 3

Which of the following nations is not a member of the OPEC oil cartel?

Accepted Answer

A)   Iraq
B)   Iran
C)   Venezuela
D)   NorwayE) B) and C)
F) A) and D)

Question 4

In which market model is there mutual interdependence?

Accepted Answer

A)   monopolistic competition
B)   pure competition
C)   pure monopoly
D)   oligopolyE) A) and C)
F) None of the above

Question 5

In game theory, each player is assumed to have the following, except

Accepted Answer

A)   alternative strategies or actions.
B)   alternative outcomes or results.
C)   alternative payoffs or earnings.
D)   alternative partners or coplayers.E) None of the above
F) A) and C)

Question 6

(Last Word)  Which of the following statements best describes the Internet market structure?

Accepted Answer

A)   It is highly competitive, with many providers and no firms in a dominant position.
B)   There are a few large firms, such as Google, Facebook, and Amazon, but they each occupy their own niche and don't infringe on the others' territories.
C)   There are a few large firms, such as Google, Facebook, and Amazon, each dominating a particular sector but always trying to gain market share in another sector.
D)   It comprises firms that have been granted monopolies by the government and are highly regulated.E) B) and D)
F) A) and D)

Question 7

In game theory, a "payoff matrix" is a table that shows the following, except

Accepted Answer

A)   the profits to each firm or player that would result from various strategycombinations.
B)   the target payoffs that each firm or player is aiming for in their different strategies.
C)   the interdependence of the firms' or players' profits, based on their alternative actions.
D)   the alternative results that the firms or players would get, based on their actions and those of others.E) B) and C)
F) A) and B)

Question 8

The Organization of Petroleum Exporting Countries (OPEC)  is an international cartel. If the cartel were to hire a consulting firm to monitor the production rates of member countries, the economic reason for this monitoring would be to

Accepted Answer

A)   make sure that each member country is producing at an output level at which price equals marginal cost.
B)   make sure all the member countries produce at least their quotas so that there will be no oil shortage.
C)   detect those member countries that are depressing prices by producing more than their assigned quotas.
D)   make sure that the marginal revenue for the last barrel of oil sold by each member country is less than its price.E) B) and D)
F) C) and D)

Question 9

If one player in a game has a dominant strategy, the other player must also have a dominant strategy.

Accepted Answer

A) True 
 B)False

Question 10

Oligopolistic industries are characterized by

Accepted Answer

A)   a few dominant firms and substantial entry barriers.
B)   a few dominant firms and no barriers to entry.
C)   a large number of firms and low entry barriers.
D)   a few dominant firms and low entry barriers.E) B) and C)
F) All of the above

Question 11

Concentration ratios may be inaccurate indicators of the degree of monopoly power in an industry because

Accepted Answer

A)   they include interindustry competition.
B)   foreign competition is not considered.
C)   they are only calculated for local and regional markets.
D)   they do not distinguish between normal and economic profit.E) A) and C)
F) A) and B)

Question 12

In an oligopolistic market, there is likely to be

Accepted Answer

A)   little consideration of the actions of rival firms.
B)   price-taking behavior on the part of firms.
C)   product homogeneity,not differentiation.
D)   neither allocative nor productive efficiency.E) All of the above
F) C) and D)

Question 13

(Last Word)  Which market structure best characterizes the various Internet markets?

Accepted Answer

A)   differentiated oligopoly
B)   homogeneous oligopoly
C)   monopolistic competition
D)   pure monopolyE) All of the above
F) C) and D)

Question 14

Assume that an industry is significantly affected by import competition from foreign suppliers. Taking this factor into account, it would mean that

Accepted Answer

A)   the Herfindahl index would be significantly higher in that industry because there are more firms in the industry.
B)   the industry is less concentrated than suggested by domestic concentration ratios.
C)   there is a high degree of interindustry competition.
D)   there is a low degree of interindustry competition.E) A) and C)
F) A) and B)

Question 15

Repeated games with reciprocity tend to reduce the payoffs for both players, as compared to a one-time game with a similar payoff matrix.

Accepted Answer

A) True 
 B)False

Question 16

An oligopolistic firm tends to have less control over its own pricing decisions than a firm in

Accepted Answer

A)   pure competition or monopolistic competition.
B)   monopoly only.
C)   pure competition or monopoly.
D)   pure competition only.E) B) and D)
F) A) and B)

Question 17

Which would make it easier to maintain an effective collusive agreement in a cartel?

Accepted Answer

A)   the emergence of a number of potential entrant firms
B)   a decrease in the elasticity of demand for the cartel's product
C)   an increase in the number of substitutes for products produced by the cartel
D)   a new method of pricing that makes it more difficult for firms in the cartel to determine the prices at which other cartel members are selling their productE) B) and C)
F) None of the above

Question 18

Mergers of firms in an industry tend to

Accepted Answer

A)   transform monopolistic competition into pure competition.
B)   transform monopolistic competition into oligopoly.
C)   reduce the Herfindahl index for the industry.
D)   break up an oligopoly.E) A) and C)
F) A) and D)

Question 19

The consumer Wi-Fi-service providers' market is best described as a

Accepted Answer

A)   monopolistic competition.
B)   monopoly.
C)   differentiated oligopoly.
D)   homogeneous oligopoly.E) B) and C)
F) A) and B)

Question 20

Which of the following best describes the efficiency results in oligopoly?

Accepted Answer

A)   P > MC and P = minimum ATC.
B)   P = MC and P > minimum ATC.
C)   P = MC and P = minimum ATC.
D)   P > MC and P > minimum ATC.E) None of the above
F) C) and D)

Exam 14: Oligopoly and Strategic Behavior

If one player in a game has a dominant strategy, the other player must also have a dominant strategy.

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The consumer Wi-Fi-service providers' market is best described as a

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An oligopolistic firm tends to have less control over its own pricing decisions than a firm in

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In which market model is there mutual interdependence?

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Oligopolistic industries are characterized by

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Which would make it easier to maintain an effective collusive agreement in a cartel?

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In an oligopolistic market, there is likely to be

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If an industry evolves from monopolistic competition to oligopoly, we would expect

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In game theory, a "payoff matrix" is a table that shows the following, except

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In game theory, each player is assumed to have the following, except

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The Organization of Petroleum Exporting Countries (OPEC) is an international cartel. If the cartel were to hire a consulting firm to monitor the production rates of member countries, the economic reason for this monitoring would be to

Correct AnswerverifiedShow Answer

Assume that an industry is significantly affected by import competition from foreign suppliers. Taking this factor into account, it would mean that

Correct AnswerverifiedShow Answer

Which of the following best describes the efficiency results in oligopoly?

Correct AnswerverifiedShow Answer

Repeated games with reciprocity tend to reduce the payoffs for both players, as compared to a one-time game with a similar payoff matrix.

Correct AnswerverifiedShow Answer

Mergers of firms in an industry tend to

Correct AnswerverifiedShow Answer

(Last Word) Which market structure best characterizes the various Internet markets?

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Concentration ratios may be inaccurate indicators of the degree of monopoly power in an industry because

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Which of the following nations is not a member of the OPEC oil cartel?

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(Last Word) Which of the following statements best describes the Internet market structure?

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Clear-cut mutual interdependence with respect to the price-output policies exists in

Correct AnswerverifiedShow Answer

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