Question 1

In which market structures does a firm have at least some ability to set the market price?

Accepted Answer

A)  Perfect competition and monopolistic competition.
B)  Monopolistic competition and oligopoly.
C)  Oligopoly and monopoly.
D)  Monopolistic competition, oligopoly and monopoly.

Question 2

In a two-sided market with network effects, the platform will most likely

Accepted Answer

A)  set the same prices for the two sides of the market.
B)  set different prices for the two sides of the market.
C)  set a price of zero for both sides of the market.
D)  combine the two groups of the market before setting its price.

Question 3

When a new product is introduced in the market, Lenny always wants to see how popular the item becomes before he purchases it. Lenny's behavior is known as

Accepted Answer

A)  overt collusion.
B)  limit-pricing.
C)  a network effect.
D)  price leadership.

Question 4

-Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. Which of the following is the outcome with cooperation?

Accepted Answer

A)  Both confess.
B)  Both don't confess.
C)  Bob confesses while Harry does not confess.
D)  Harry confesses while Bo does not confess.

Question 5

A market situation in which there are a few large firms is called

Accepted Answer

A)  monopolistic competition.
B)  imperfect competition.
C)  oligopoly.
D)  monopoly.

Question 6

Economies of scale means that

Accepted Answer

A)  the average fixed cost curve slopes downward over its entire range.
B)  the four-firm concentration ratio is below 80.
C)  the long-run average total cost curve slopes downward over it entire range.
D)  the long-run total cost curve slopes downward over it entire range.

Question 7

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.

Question 8

The idea that if enough consumers cut back on their use of a product it induces other consumers to do the same is referred to as

Accepted Answer

A)  positive market feedback.
B)  non-dynamic market feedback.
C)  negative market feedback.
D)  elicit market feedback.

Question 9

There are fewer than half as many publishers of college textbooks in the United States now as a generation ago. Three companies alone account for almost two-thirds of the sale of new textbooks. This market situation characterized by very few sellers is known as

Accepted Answer

A)  an oligopoly.
B)  perfect competition.
C)  pure monopoly.
D)  monopolistic competition.

Question 10

If a retail food chain merged with a meat packing company, this would be an example of a

Accepted Answer

A)  horizontal merger.
B)  conglomerate merger.
C)  vertical merger.
D)  diagonal merger.

Question 11

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.

Question 12

A game in which the players explicitly coordinate their decisions to make themselves better off is a

Accepted Answer

A)  cooperative game.
B)  noncooperative game.
C)  zero-sum game.
D)  negative-sum game.

Question 13

The payoff matrix shows all of the following EXCEPT

Accepted Answer

A)  if both oligopolists choose a high price, each makes $6 million.
B)  if they both choose a low price, each makes $4 million.
C)  if one chooses a low price and the other doesn't, the low priced firm will make $8 million.
D)  if one oligopolist chooses a high price and the other doesn't, the high-priced firm makes $8 million.

Question 14

Because all of his friends stopped exclusively wearing black clothes, Doug wears anything but black clothes. This is known as

Accepted Answer

A)  a negative sum game.
B)  collusion.
C)  positive market feedback.
D)  negative market feedback.

Question 15

A market with many sellers, some influence over price, low barriers to entry, a differentiated product, and non-price competition often taking the form of advertising is known as

Accepted Answer

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

Question 16

Economies of scale

Accepted Answer

A)  do not arise in oligopolistic industries.
B)  can exist but are rare in oligopolistic industries.
C)  can exist but fail to create barriers to entry in oligopolistic industries.
D)  are commonplace and often a barrier to entry in oligopolistic industries.

Question 17

Which of the following is NOT a cause for an oligopoly to exist?

Accepted Answer

A)  economies of scale
B)  structural dependence
C)  barriers to entry
D)  horizontal mergers

Question 18

A game in which all the players are better off at the end of the game is a

Accepted Answer

A)  tit-for-tat game.
B)  dominant strategy game.
C)  positive-sum game.
D)  noncooperative game.

Question 19

The joining of firms that are producing or selling a similar product is

Accepted Answer

A)  competition by merger.
B)  a vertical merger.
C)  a horizontal merger.
D)  a hostile takeover.

Question 20

When there is a tendency for a particular product to come into favor with additional consumers because other consumers have chosen to purchase the product,

Accepted Answer

A)  negative market feedback occurs.
B)  positive market feedback occurs.
C)  there is no dominant strategy.
D)  a price war must result.

Exam 26: Oligopoly and Strategic Behavior

The idea that if enough consumers cut back on their use of a product it induces other consumers to do the same is referred to as

Correct AnswerverifiedShow Answer

In a two-sided market with network effects, the platform will most likely

Correct AnswerverifiedShow Answer

When there is a tendency for a particular product to come into favor with additional consumers because other consumers have chosen to purchase the product,

Correct AnswerverifiedShow Answer

A market with many sellers, some influence over price, low barriers to entry, a differentiated product, and non-price competition often taking the form of advertising is known as

Correct AnswerverifiedShow Answer

A market situation in which there are a few large firms is called

Correct AnswerverifiedShow Answer

When a new product is introduced in the market, Lenny always wants to see how popular the item becomes before he purchases it. Lenny's behavior is known as

Correct AnswerverifiedShow Answer

Which of the following is NOT a cause for an oligopoly to exist?

Correct AnswerverifiedShow Answer

A game in which all the players are better off at the end of the game is a

Correct AnswerverifiedShow Answer

There are fewer than half as many publishers of college textbooks in the United States now as a generation ago. Three companies alone account for almost two-thirds of the sale of new textbooks. This market situation characterized by very few sellers is known as

Correct AnswerverifiedShow Answer

The joining of firms that are producing or selling a similar product is

Correct AnswerverifiedShow Answer

Economies of scale

Correct AnswerverifiedShow Answer

A game in which the players explicitly coordinate their decisions to make themselves better off is a

Correct AnswerverifiedShow Answer

-Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. Which of the following is the outcome with cooperation?

Correct AnswerverifiedShow Answer

The payoff matrix shows all of the following EXCEPT

Correct AnswerverifiedShow Answer

An example of a positive market feedback is

Correct AnswerverifiedShow Answer

Oligopolistic industries are characterized by a

Correct AnswerverifiedShow Answer

Economies of scale means that

Correct AnswerverifiedShow Answer

If a retail food chain merged with a meat packing company, this would be an example of a

Correct AnswerverifiedShow Answer

In which market structures does a firm have at least some ability to set the market price?

Correct AnswerverifiedShow Answer

Because all of his friends stopped exclusively wearing black clothes, Doug wears anything but black clothes. This is known as

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