Question 1

In the long run, a monopolistically competitive firm produces at minimum average cost.

Accepted Answer

A) True 
 B)False

Question 2

The contestable market theory best applies to

Accepted Answer

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

Question 3

Figure 12-2
 
-In Figure 12-2, which of the graphs represents a monopolistic competitor in long-run equilibrium?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4

Question 4

Under monopolistic competition, profits cannot persist because new firms will be attracted to the market.

Accepted Answer

A) True 
 B)False

Question 5

Figure 12-2
 
-In Figure 12-2, which of the graphs represents a firm that is a sales revenue maximizer?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4

Question 6

A monopolistically competitive firm

Accepted Answer

A)  tries to differentiate its product from competitors' products.
B)  faces a perfectly elastic demand curve for its product.
C)  has more monopoly power in the long run than does a perfectly competitive firm.
D)  is always a retail establishment.

Question 7

Oligopolists seldom change prices, because they don't like change.

Accepted Answer

A) True 
 B)False

Question 8

International trade can be correctly considered as an example of a zero-sum game.

Accepted Answer

A) True 
 B)False

Question 9

Define the following terms and explain their importance to the study of economics.
A)monopolistic competition
B)oligopoly
C)cartel
D)oligopolistic interdependence

Accepted Answer

a.monopolistic competition is a market s...

Question 10

Repeated games can lead to tacit collusion.

Accepted Answer

A) True 
 B)False

Question 11

The behavior of the monopolistic firm:

Accepted Answer

A)  ​maximizes the benefits to consumers, given the resources available to the economy.
B)  ​reduces output in order to raise prices in the short-term.
C)  ​results in excess capacity and inefficiency. 
D)  ​both b and c

Question 12

An oligopoly is a market dominated by a few sellers.

Accepted Answer

A) True 
 B)False

Question 13

What is a repeated game?
 Hoe does this helps the players in a game?

Accepted Answer

A repeated game is one that is played ov...

Question 14

When an airline reduces its fares, other airlines typically match the action.But when an airline increases its fare, other airlines do not follow suit.Which oligopoly model cartel, price leadership, or kinked demand best fits the airline industry as described?
 Justify your choice and explain why the other models are less appropriate.

Accepted Answer

The interdependence fits the kinked dema...

Question 15

A market which firms can enter if they choose and exit without losing money invested is

Accepted Answer

A)  pure monopoly.
B)  duopoly.
C)  contestable.
D)  a market where there are kinked demand curves.

Question 16

Define the following terms and explain their importance to the study of economics.
a.maximin criterion
b.Nash equilibrium
c.Dominant Strategy
d.Zero-sum game
e.Credible threat

Accepted Answer

a.Maximin criterion means selecting the ...

Question 17

The demand curve facing a monopolistically competitive firm is generally

Accepted Answer

A)  steeper than the demand curve that would face a perfectly competitive firm in the same industry.
B)  less elastic than the demand curve that would face a monopoly in the same industry.
C)  steeper and more elastic than the demand curve that would face a perfectly competitive firm in the same industry.
D)  flatter than the demand curve that would face a monopoly in the same industry.

Question 18

Heavy advertising expenditures usually indicate

Accepted Answer

A)  oligopoly.
B)  pure competition or monopolistic competition.
C)  oligopoly or monopoly.
D)  differentiated pure competition or monopoly.

Question 19

Briefly and concisely define the following terms and explain their importance in the study of economics.
a.excess capacity theorem
b.price leadership
c.kinked demand curve
d.perfectly contestable market

Accepted Answer

a.The excess capacity theorem applies to...

Question 20

Advertising never makes sense for an oligopolistic firm.

Accepted Answer

A) True 
 B)False

Exam 12: Between Competition and Monopoly

Define the following terms and explain their importance to the study of economics. A)monopolistic competition B)oligopoly C)cartel D)oligopolistic interdependence

Correct Answer
verified
a.monopolistic competition is a market s...
View Answer

Oligopolists seldom change prices, because they don't like change.

Correct Answer
verified

In the long run, a monopolistically competitive firm produces at minimum average cost.

Correct Answer
verified

An oligopoly is a market dominated by a few sellers.

Correct Answer
verified

International trade can be correctly considered as an example of a zero-sum game.

Correct Answer
verified

A monopolistically competitive firm

Correct Answer
verified

Figure 12-2 -In Figure 12-2, which of the graphs represents a firm that is a sales revenue maximizer?

Correct Answer
verified

Correct Answer
verified
The interdependence fits the kinked dema...
View Answer

Under monopolistic competition, profits cannot persist because new firms will be attracted to the market.

Correct Answer
verified

What is a repeated game? Hoe does this helps the players in a game?

Correct Answer
verified
A repeated game is one that is played ov...
View Answer

Repeated games can lead to tacit collusion.

Correct Answer
verified

The contestable market theory best applies to

Correct Answer
verified

Figure 12-2 -In Figure 12-2, which of the graphs represents a monopolistic competitor in long-run equilibrium?

Correct Answer
verified

Advertising never makes sense for an oligopolistic firm.

Correct Answer
verified

The behavior of the monopolistic firm:

Correct Answer
verified

The demand curve facing a monopolistically competitive firm is generally

Correct Answer
verified

Heavy advertising expenditures usually indicate

Correct Answer
verified

Define the following terms and explain their importance to the study of economics. a.maximin criterion b.Nash equilibrium c.Dominant Strategy d.Zero-sum game e.Credible threat

Correct Answer
verified
a.Maximin criterion means selecting the ...
View Answer

A market which firms can enter if they choose and exit without losing money invested is

Correct Answer
verified

Briefly and concisely define the following terms and explain their importance in the study of economics. a.excess capacity theorem b.price leadership c.kinked demand curve d.perfectly contestable market

Correct Answer
verified
a.The excess capacity theorem applies to...
View Answer

Exam 12: Between Competition and Monopoly

Define the following terms and explain their importance to the study of economics. A)monopolistic competition B)oligopoly C)cartel D)oligopolistic interdependence

Correct Answerverifieda.monopolistic competition is a market s...View AnswerShow Answer

Oligopolists seldom change prices, because they don't like change.

Correct AnswerverifiedShow Answer

In the long run, a monopolistically competitive firm produces at minimum average cost.

Correct AnswerverifiedShow Answer

An oligopoly is a market dominated by a few sellers.

Correct AnswerverifiedShow Answer

International trade can be correctly considered as an example of a zero-sum game.

Correct AnswerverifiedShow Answer

A monopolistically competitive firm

Correct AnswerverifiedShow Answer

Figure 12-2 -In Figure 12-2, which of the graphs represents a firm that is a sales revenue maximizer?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe interdependence fits the kinked dema...View AnswerShow Answer

Under monopolistic competition, profits cannot persist because new firms will be attracted to the market.

Correct AnswerverifiedShow Answer

What is a repeated game? Hoe does this helps the players in a game?

Correct AnswerverifiedA repeated game is one that is played ov...View AnswerShow Answer

Repeated games can lead to tacit collusion.

Correct AnswerverifiedShow Answer

The contestable market theory best applies to

Correct AnswerverifiedShow Answer

Figure 12-2 -In Figure 12-2, which of the graphs represents a monopolistic competitor in long-run equilibrium?

Correct AnswerverifiedShow Answer

Advertising never makes sense for an oligopolistic firm.

Correct AnswerverifiedShow Answer

The behavior of the monopolistic firm:

Correct AnswerverifiedShow Answer

The demand curve facing a monopolistically competitive firm is generally

Correct AnswerverifiedShow Answer

Heavy advertising expenditures usually indicate

Correct AnswerverifiedShow Answer

Define the following terms and explain their importance to the study of economics. a.maximin criterion b.Nash equilibrium c.Dominant Strategy d.Zero-sum game e.Credible threat

Correct Answerverifieda.Maximin criterion means selecting the ...View AnswerShow Answer

A market which firms can enter if they choose and exit without losing money invested is

Correct AnswerverifiedShow Answer

Briefly and concisely define the following terms and explain their importance in the study of economics. a.excess capacity theorem b.price leadership c.kinked demand curve d.perfectly contestable market

Correct Answerverifieda.The excess capacity theorem applies to...View AnswerShow Answer

Correct Answer
verified
a.monopolistic competition is a market s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The interdependence fits the kinked dema...
View Answer

Correct Answer
verified

Correct Answer
verified
A repeated game is one that is played ov...
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.Maximin criterion means selecting the ...
View Answer

Correct Answer
verified

Correct Answer
verified
a.The excess capacity theorem applies to...
View Answer