Question 1

Table 17-24
Two firms are considering going out of business and selling their assets. Each considers what happens if the other goes out of business. The payoff matrix below shows the net gain or loss to each firm. 
-Refer to Table 17-24. Which firm's dominant strategy is to sell?

Accepted Answer

A)  firm A's and firm B's
B)  firm A's but not firm B's
C)  firm B's but not firm A's
D)  neither firm A's nor firm B'sE) None of the above
F) A) and B)

Question 2

Table 17-27
Each year the United States considers renewal of Most Favored Nation (MFN)  trading status with Farland (a mythical nation) . Historically, legislators have made threats of not renewing MFN status because of human rights abuses in Farland. The non-renewal of MFN trading status is likely to involve some retaliatory measures by Farland. The payoff table below shows the potential economic gains associated with a game in which Farland may impose trade sanctions against U.S. firms and the United States may not renew MFN status with Farland. The table contains the dollar value of all trade-flow benefits to the United States and Farland. 
-Refer to Table 17-27. Pursuing its own best interests, the U.S. will renew MFN status with Farland

Accepted Answer

A)  only if Farland does not impose trade sanctions against U.S. firms.
B)  only if Farland imposes trade sanctions against U.S. firms.
C)  regardless of whether Farland imposes trade sanctions against U.S. firms.
D)  None of the above is correct. In pursuing its own best interests, the United States will in no case renew MFN status with Farland.E) A) and C)
F) A) and D)

Question 3

A tit-for-tat strategy, in a repeated game, is one in which a player starts by cooperating and then does whatever the other player did last time.

Accepted Answer

A) True 
 B)False

Question 4

Game theory is necessary to understand which kinds of markets? (i) 
Perfectly competitive
(ii) 
Monopolistically competitive
(iii) 
Oligopoly
(iv) 
Duopoly
(v) 
Monopoly

Accepted Answer

A)  (i)  and (ii)  only
B)  (iii) , (iv) , and (v)  only
C)  (iii)  and (iv)  only
D)  (i) , (ii) , (iii) , (iv) , and (v) E) B) and D)
F) All of the above

Question 5

In a game, a dominant strategy is

Accepted Answer

A)  the best strategy for a player to follow only if other players are cooperative.
B)  the best strategy for a player to follow, regardless of the strategies followed by other players.
C)  a strategy that must appear in every game.
D)  a strategy that leads to one player's interests dominating the interests of the other players.E) All of the above
F) B) and C)

Question 6

As the number of sellers in an oligopoly becomes very large,

Accepted Answer

A)  the quantity of output approaches the socially efficient quantity.
B)  the price approaches marginal cost.
C)  the price effect is diminished.
D)  All of the above are correct.E) A) and B)
F) B) and D)

Question 7

Table 17-25
There are just two producers of a certain product. Each is considering offering promotional discounts. 
-Refer to Table 17-25. The dominant strategy

Accepted Answer

A)  for both firms is to offer the discount.
B)  for both firms is to not offer the discount.
C)  for firm A is to offer the discount. The dominant strategy for firm B is to not offer the discount.
D)  for firm A is to not offer the discount. The dominant strategy for firm B is to offer the discount.E) B) and D)
F) None of the above

Question 8

The paradoxical nature of oligopoly can be demonstrated by the fact that, even though the monopoly outcome is best for the oligopolists,

Accepted Answer

A)  they collude to set the output level equal to the Nash equilibrium level of output.
B)  they have incentives to increase production above the monopoly outcome.
C)  they do not behave as profit maximizers.
D)  self-interest juxtaposes the profits earned at the Nash equilibrium.E) B) and C)
F) A) and B)

Question 9

When firms form a cartel in an oligopoly market, the total output is always the same as if the market were perfectly competitive.​

Accepted Answer

A) True 
 B)False

Question 10

Why are the actions of the firms in an oligopoly interdependent?

Accepted Answer

because there are on...

Question 11

The more firms an oligopoly has,

Accepted Answer

A)  the more likely it is to earn monopoly profits.
B)  the higher the price of the product.
C)  the farther the equilibrium quantity will be from the socially efficient quantity.
D)  the more likely the firms will charge a price close to the perfectly competitive price.E) A) and C)
F) A) and B)

Question 12

The Clayton Act of 1914 allowed a person who successfully sued a company for damages caused by an illegal arrangement to restrain trade to recover __________ damages.

Accepted Answer

The answer of The Clayton Act of 1914 allowed a...

Question 13

Game theory is necessary to understand which kinds of markets? (i) 
Perfectly competitive
(ii) 
Monopolistically competitive
(iii) 
Oligopoly
(iv) 
Duopoly
(v) 
Monopoly

Accepted Answer

A)  (i)  and (ii)  only
B)  (iii) , (iv) , and (v)  only
C)  (iii)  and (iv)  only
D)  (i) , (ii) , (iii) , (iv) , and (v) E) A) and B)
F) A) and C)

Question 14

The practice of requiring someone to buy two or more items together, rather than separately, is called

Accepted Answer

A)  resale maintenance.
B)  product fixing.
C)  tying.
D)  free-riding.E) All of the above
F) B) and D)

Question 15

Acme Computer Co. sells computers to retail stores for $400. If Acme requires the retailers to charge customers $500 for the computers, then it is engaging in

Accepted Answer

A)  resale price maintenance.
B)  predatory pricing.
C)  tying.
D)  monopolistic competition.E) B) and C)
F) None of the above

Question 16

In a duopoly if the firms have agreed to jointly maximize profits, then each firm can increase its current individual profits by producing more.

Accepted Answer

A) True 
 B)False

Question 17

Policymakers should be aggressive in using their powers to place limits on firm behavior, because business practices that appear to reduce competition never have any legitimate purposes.

Accepted Answer

A) True 
 B)False

Question 18

Whenever a cartel in a duopoly breaks down,​

Accepted Answer

A)  ​both firms obtain higher profits.
B)  ​total output in the market will rise.
C)  ​price in the market will rise.
D)  ​the socially optimal output will be produced.E) A) and C)
F) All of the above

Question 19

Which of the following groups or entities has the authority to initiate legal suits to enforce antitrust laws?

Accepted Answer

A)  the U.S. Justice Department
B)  private citizens
C)  corporations
D)  All of the above are correct.E) A) and C)
F) None of the above

Question 20

The decisions of the US and Soviet Union to build nuclear weapons is much like the prisoners' dilemma.

Accepted Answer

A) True 
 B)False

Exam 17: Oligopoly

As the number of sellers in an oligopoly becomes very large,

Correct Answer
verified

Correct Answer
verified

The decisions of the US and Soviet Union to build nuclear weapons is much like the prisoners' dilemma.

Correct Answer
verified

Game theory is necessary to understand which kinds of markets? (i) Perfectly competitive (ii) Monopolistically competitive (iii) Oligopoly (iv) Duopoly (v) Monopoly

Correct Answer
verified

Policymakers should be aggressive in using their powers to place limits on firm behavior, because business practices that appear to reduce competition never have any legitimate purposes.

Correct Answer
verified

The paradoxical nature of oligopoly can be demonstrated by the fact that, even though the monopoly outcome is best for the oligopolists,

Correct Answer
verified

Which of the following groups or entities has the authority to initiate legal suits to enforce antitrust laws?

Correct Answer
verified

When firms form a cartel in an oligopoly market, the total output is always the same as if the market were perfectly competitive.

Correct Answer
verified

Whenever a cartel in a duopoly breaks down,

Correct Answer
verified

A tit-for-tat strategy, in a repeated game, is one in which a player starts by cooperating and then does whatever the other player did last time.

Correct Answer
verified

The practice of requiring someone to buy two or more items together, rather than separately, is called

Correct Answer
verified

In a game, a dominant strategy is

Correct Answer
verified

The Clayton Act of 1914 allowed a person who successfully sued a company for damages caused by an illegal arrangement to restrain trade to recover __________ damages.

Correct Answer
verified

Acme Computer Co. sells computers to retail stores for $400. If Acme requires the retailers to charge customers $500 for the computers, then it is engaging in

Correct Answer
verified

Table 17-24 Two firms are considering going out of business and selling their assets. Each considers what happens if the other goes out of business. The payoff matrix below shows the net gain or loss to each firm. -Refer to Table 17-24. Which firm's dominant strategy is to sell?

Correct Answer
verified

In a duopoly if the firms have agreed to jointly maximize profits, then each firm can increase its current individual profits by producing more.

Correct Answer
verified

The more firms an oligopoly has,

Correct Answer
verified

Table 17-25 There are just two producers of a certain product. Each is considering offering promotional discounts. -Refer to Table 17-25. The dominant strategy

Correct Answer
verified

Why are the actions of the firms in an oligopoly interdependent?

Correct Answer
verified
because there are on...
View Answer

Game theory is necessary to understand which kinds of markets? (i) Perfectly competitive (ii) Monopolistically competitive (iii) Oligopoly (iv) Duopoly (v) Monopoly

Correct Answer
verified

Exam 17: Oligopoly

As the number of sellers in an oligopoly becomes very large,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The decisions of the US and Soviet Union to build nuclear weapons is much like the prisoners' dilemma.

Correct AnswerverifiedShow Answer

Game theory is necessary to understand which kinds of markets? (i) Perfectly competitive (ii) Monopolistically competitive (iii) Oligopoly (iv) Duopoly (v) Monopoly

Correct AnswerverifiedShow Answer

Policymakers should be aggressive in using their powers to place limits on firm behavior, because business practices that appear to reduce competition never have any legitimate purposes.

Correct AnswerverifiedShow Answer

The paradoxical nature of oligopoly can be demonstrated by the fact that, even though the monopoly outcome is best for the oligopolists,

Correct AnswerverifiedShow Answer

Which of the following groups or entities has the authority to initiate legal suits to enforce antitrust laws?

Correct AnswerverifiedShow Answer

When firms form a cartel in an oligopoly market, the total output is always the same as if the market were perfectly competitive.​

Correct AnswerverifiedShow Answer

Whenever a cartel in a duopoly breaks down,​

Correct AnswerverifiedShow Answer

A tit-for-tat strategy, in a repeated game, is one in which a player starts by cooperating and then does whatever the other player did last time.

Correct AnswerverifiedShow Answer

The practice of requiring someone to buy two or more items together, rather than separately, is called

Correct AnswerverifiedShow Answer

In a game, a dominant strategy is

Correct AnswerverifiedShow Answer

The Clayton Act of 1914 allowed a person who successfully sued a company for damages caused by an illegal arrangement to restrain trade to recover __________ damages.

Correct AnswerverifiedShow Answer

Acme Computer Co. sells computers to retail stores for $400. If Acme requires the retailers to charge customers $500 for the computers, then it is engaging in

Correct AnswerverifiedShow Answer

Table 17-24 Two firms are considering going out of business and selling their assets. Each considers what happens if the other goes out of business. The payoff matrix below shows the net gain or loss to each firm. -Refer to Table 17-24. Which firm's dominant strategy is to sell?

Correct AnswerverifiedShow Answer

In a duopoly if the firms have agreed to jointly maximize profits, then each firm can increase its current individual profits by producing more.

Correct AnswerverifiedShow Answer

The more firms an oligopoly has,

Correct AnswerverifiedShow Answer

Table 17-25 There are just two producers of a certain product. Each is considering offering promotional discounts. -Refer to Table 17-25. The dominant strategy

Correct AnswerverifiedShow Answer

Why are the actions of the firms in an oligopoly interdependent?

Correct Answerverifiedbecause there are on...View AnswerShow Answer

Game theory is necessary to understand which kinds of markets? (i) Perfectly competitive (ii) Monopolistically competitive (iii) Oligopoly (iv) Duopoly (v) Monopoly

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

When firms form a cartel in an oligopoly market, the total output is always the same as if the market were perfectly competitive.

Correct Answer
verified

Whenever a cartel in a duopoly breaks down,

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
because there are on...
View Answer

Correct Answer
verified