Question 1

In game theory,the strategy that always yields the highest benefit for the player using it is the

Accepted Answer

A)  dominant strategy.
B)  cooperative strategy.
C)  prisoners' strategy.
D)  matrix strategy.E) A) and C)
F) B) and D)

Question 2

A market with one seller,considerable influence over price,high barriers to entry,a homogeneous product,and non-price competition to allow for price discrimination is known as

Accepted Answer

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

Question 3

A concentration ratio is used to

Accepted Answer

A)  determine whether a market structure is oligopoly.
B)  determine the importance of labor in the production process.
C)  determine the degree of homogeneity in the market.
D)  see if a firm qualifies for federal assistance.E) A) and B)
F) A) and C)

Question 4

If Target were to merge with Wal-Mart,this would be referred to as a(n)

Accepted Answer

A)  horizontal merger.
B)  vertical merger.
C)  conglomerate merger.
D)  anti-competitive merger.E) C) and D)
F) B) and C)

Question 5

A cartel is likely to last longer if

Accepted Answer

A)  more new firms enter the market.
B)  the profits of participating members are relatively stable.
C)  market prices vary more over time.
D)  there are more firms in the industry.E) A) and B)
F) A) and C)

Question 6

A local utility is an example of

Accepted Answer

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

Question 7

An association of producers in an industry that agree to set common prices and output quotas to prevent competition is

Accepted Answer

A)  an oligopolist.
B)  a monopolistic competitor.
C)  a constrained monopoly.
D)  a cartel.E) A) and D)
F) A) and C)

Question 8

Which of the following statements about concentration ratios is correct?

Accepted Answer

A)  A high concentration ratio indicates that the industry is a monopoly.
B)  A high concentration ratio indicates that the industry is monopolistically competitive.
C)  A high concentration ratio suggests that the industry is characterized by strategic independence.
D)  A high concentration ratio suggests that the industry is characterized by strategic dependence.E) B) and D)
F) B) and C)

Question 9

All of the following can create an oligopolistic structure EXCEPT

Accepted Answer

A)  low barriers to entry.
B)  economies of scale.
C)  government licensing rules.
D)  mergers.E) B) and C)
F) C) and D)

Question 10

A group of firms that try to work together to earn monopoly profits is called a(n)

Accepted Answer

A)  patent.
B)  public enterprise.
C)  cartel.
D)  natural monopoly.E) All of the above
F) A) and D)

Question 11

Which of the following statements concerning the prisoner's dilemma is true?

Accepted Answer

A)  The player who moves last will always win.
B)  Confessing is the dominant strategy for both players.
C)  Neither player will pick the dominant strategy.
D)  The player who moves first will always win.E) None of the above
F) A) and C)

Question 12

Suppose there are four firms in an industry.The market shares of the four firms are 5 percent,20 percent,35 percent,and 40 percent.The Herfindahl-Hirschman index for that industry is

Accepted Answer

A)  6,650.
B)  3,250.
C)  1,250.
D)  100.E) None of the above
F) All of the above

Question 13

Monopolistically competitive markets and oligopolies are similar in that

Accepted Answer

A)  the number of firms is identical.
B)  the kinked demand curve can be used to analyze the firms' pricing decisions.
C)  there is mutual interdependence amongst the firms.
D)  nonprice competition is a tool used.E) None of the above
F) All of the above

Question 14

In which market structures do firms earn long-term profits of zero?

Accepted Answer

A)  Perfect competition and monopolistic competition
B)  Monopolistic competition and oligopoly
C)  Oligopoly and monopoly
D)  Perfect competition and monopolyE) B) and C)
F) A) and D)

Question 15

Suppose a ten firm industry has total sales of $35 million per year.The largest firm have sales of $10 million,the third largest firm has sales of $4 million,and the fourth largest firm has sales of $2 million.If fifth through tenth largest firms combined have annual sales of $12 million,the four-firm concentration ratio for this industry is

Accepted Answer

A)  45.7 percent.
B)  80 percent.
C)  65.7 percent.
D)  none of the above.E) B) and C)
F) A) and D)

Question 16

Cartel agreements are more likely to break down when

Accepted Answer

A)  there are few variations in market demand.
B)  new firms enter the market.
C)  participating firms earn huge profits.
D)  none of the aboveE) C) and D)
F) A) and B)

Question 17

Oligopolistic industries are characterized by a

Accepted Answer

A)  few large firms and no barriers to entry.
B)  large number of firms and no barriers to entry.
C)  few large firms and substantial barriers to entry.
D)  large number of firms and substantial barriers to entry.E) A) and B)
F) B) and C)

Question 18

If an industry has 25 firms that collectively have $150 million in total sales and the top four firms in this industry account for $90 million in sales,what is the concentration ratio of the top four firms in this industry?

Accepted Answer

A)  42 percent
B)  60 percent
C)  70 percent
D)  80 percentE) All of the above
F) None of the above

Question 19

Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) making a decision to advertise or not.Which of the following is the outcome of the dominant strategy without cooperation?

Accepted Answer

A)  Both firm X and firm Y choose not to advertise.
B)  Both firm X and firm Y choose to advertise.
C)  Firm X chooses to advertise while firm Y chooses not to advertise.
D)  Firm X chooses not to advertise while firm Y chooses to advertise.E) All of the above
F) A) and B)

Question 20

An example of a positive market feedback is

Accepted Answer

A)  the emergence of the iPod.
B)  routine maintenance on a car.
C)  the declining use of land-line telephones for long distance calls.
D)  the use of telegraph services in the twenty-first century.E) B) and D)
F) A) and C)

Exam 13: Oligopoly and Strategic Behavior

Oligopolistic industries are characterized by a

Correct Answer
verified

Correct Answer
verified

A cartel is likely to last longer if

Correct Answer
verified

A market with one seller,considerable influence over price,high barriers to entry,a homogeneous product,and non-price competition to allow for price discrimination is known as

Correct Answer
verified

A group of firms that try to work together to earn monopoly profits is called a(n)

Correct Answer
verified

In which market structures do firms earn long-term profits of zero?

Correct Answer
verified

Monopolistically competitive markets and oligopolies are similar in that

Correct Answer
verified

Which of the following statements about concentration ratios is correct?

Correct Answer
verified

Cartel agreements are more likely to break down when

Correct Answer
verified

Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) making a decision to advertise or not.Which of the following is the outcome of the dominant strategy without cooperation?

Correct Answer
verified

A local utility is an example of

Correct Answer
verified

Suppose there are four firms in an industry.The market shares of the four firms are 5 percent,20 percent,35 percent,and 40 percent.The Herfindahl-Hirschman index for that industry is

Correct Answer
verified

All of the following can create an oligopolistic structure EXCEPT

Correct Answer
verified

An association of producers in an industry that agree to set common prices and output quotas to prevent competition is

Correct Answer
verified

A concentration ratio is used to

Correct Answer
verified

If Target were to merge with Wal-Mart,this would be referred to as a(n)

Correct Answer
verified

If an industry has 25 firms that collectively have $150 million in total sales and the top four firms in this industry account for $90 million in sales,what is the concentration ratio of the top four firms in this industry?

Correct Answer
verified

Which of the following statements concerning the prisoner's dilemma is true?

Correct Answer
verified

An example of a positive market feedback is

Correct Answer
verified

In game theory,the strategy that always yields the highest benefit for the player using it is the

Correct Answer
verified

Exam 13: Oligopoly and Strategic Behavior

Oligopolistic industries are characterized by a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A cartel is likely to last longer if

Correct AnswerverifiedShow Answer

A market with one seller,considerable influence over price,high barriers to entry,a homogeneous product,and non-price competition to allow for price discrimination is known as

Correct AnswerverifiedShow Answer

A group of firms that try to work together to earn monopoly profits is called a(n)

Correct AnswerverifiedShow Answer

In which market structures do firms earn long-term profits of zero?

Correct AnswerverifiedShow Answer

Monopolistically competitive markets and oligopolies are similar in that

Correct AnswerverifiedShow Answer

Which of the following statements about concentration ratios is correct?

Correct AnswerverifiedShow Answer

Cartel agreements are more likely to break down when

Correct AnswerverifiedShow Answer

Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) making a decision to advertise or not.Which of the following is the outcome of the dominant strategy without cooperation?

Correct AnswerverifiedShow Answer

A local utility is an example of

Correct AnswerverifiedShow Answer

Suppose there are four firms in an industry.The market shares of the four firms are 5 percent,20 percent,35 percent,and 40 percent.The Herfindahl-Hirschman index for that industry is

Correct AnswerverifiedShow Answer

All of the following can create an oligopolistic structure EXCEPT

Correct AnswerverifiedShow Answer

An association of producers in an industry that agree to set common prices and output quotas to prevent competition is

Correct AnswerverifiedShow Answer

A concentration ratio is used to

Correct AnswerverifiedShow Answer

If Target were to merge with Wal-Mart,this would be referred to as a(n)

Correct AnswerverifiedShow Answer

If an industry has 25 firms that collectively have $150 million in total sales and the top four firms in this industry account for $90 million in sales,what is the concentration ratio of the top four firms in this industry?

Correct AnswerverifiedShow Answer

Which of the following statements concerning the prisoner's dilemma is true?

Correct AnswerverifiedShow Answer

An example of a positive market feedback is

Correct AnswerverifiedShow Answer

In game theory,the strategy that always yields the highest benefit for the player using it is the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified