Question 1

Evaluate economic welfare under oligopolistic competition.

Accepted Answer

In the case of oligopolists trying to ma...

Question 2

Oligopolies can end up looking like competitive markets if the number and behaviour of firms is which of the following

Accepted Answer

A)  large and cooperative
B)  large and noncooperative
C)  small and cooperative
D)  small and noncooperativeE) None of the above
F) B) and D)

Question 3

Like monopolists,what do oligopolists know about the result of an increase in the quantity of output

Accepted Answer

A)  It reduces the price of their product.
B)  It reduces their profit.
C)  It reduces their revenue.
D)  It reduces productivity.E) C) and D)
F) B) and C)

Question 4

What did the Competition Act define a cooperative agreement to be

Accepted Answer

A)  unenforceable outside of established judicial review processes
B)  enforceable with proper judicial review
C)  a criminal conspiracy
D)  a crime, but did not give direction on possible penaltiesE) None of the above
F) B) and D)

Question 5

Which of the following does NOT explain why oligopolies often fail to maintain cooperation

Accepted Answer

A)  the story of the prisoners' dilemma
B)  game theory
C)  the fact that self-interest is consistent with collective group interest
D)  the fact that self-interest is not always consistent with collective group interestE) All of the above
F) A) and D)

Question 6

How do equilibrium prices in markets characterized by oligopoly compare with those in monopolies and perfectly competitive markets

Accepted Answer

A)  They are higher than in monopoly markets and higher than in perfectly competitive markets.
B)  They are higher than in monopoly markets and lower than in perfectly competitive markets.
C)  They are lower than in monopoly markets and higher than in perfectly competitive markets.
D)  They are lower than in monopoly markets and lower than in perfectly competitive markets.E) A) and B)
F) None of the above

Question 7

One way that public policy encourages cooperation among oligopolists is through common law.

Accepted Answer

A) True 
 B)False

Question 8

What is the basic characteristic of a market that is characterized by imperfect competition

Accepted Answer

A)  Firms are price takers.
B)  There are generally a large number of firms.
C)  There are at least a few firms that compete with one another.
D)  The actions of one firm in the market have no impact on the other firms' profits.E) B) and D)
F) All of the above

Question 9

Oligopolies would like to act like which of the following

Accepted Answer

A)  duopoly, but self-interest often drives them closer to competition
B)  competitive firms, but self-interest often drives them closer to duopoly
C)  monopoly, but self-interest often drives them closer to duopoly
D)  monopoly, but self-interest often drives them closer to competitionE) A) and B)
F) A) and C)

Question 10

As a group,how would oligopolists generally be better off

Accepted Answer

A)  if they would produce the perfectly competitive quantity of output
B)  if they would produce more than the perfectly competitive quantity of output
C)  if they would charge the same price that a monopolist would charge if the market were a monopoly
D)  if they would operate according to their own individual self-interestsE) B) and D)
F) None of the above

Question 11

The game that monopolists play in trying to reach the monopoly outcome is similar to the game that the two prisoners play in the prisoners' dilemma.

Accepted Answer

A) True 
 B)False

Question 12

Two major athletic shoe companies are each considering whether or not to advertise during the Super Bowl. Devise a simple prisoners' dilemma game to demonstrate the strategic considerations that are relevant to this decision. Does the repeated game scenario differ from a single-period game? Is it possible that a repeated game (without collusive agreements) could lead to an outcome that is better than a single-period game? Explain the circumstances in which this may be true.

Accepted Answer

The answer should show that if both shoe...

Question 13

Total profit for all firms in an oligopolistic market is greater than that of a monopolist,assuming no price-fixing occurs in the market.

Accepted Answer

A) True 
 B)False

Question 14

How are oligopolists generally best off,in terms of their profits

Accepted Answer

A)  operating in a Nash equilibrium
B)  producing a total quantity of output that falls short of the Nash-equilibrium total quantity
C)  producing a total quantity of output that exceeds the Nash-equilibrium total quantity
D)  charging a price that falls short of the Nash-equilibrium priceE) B) and C)
F) None of the above

Question 15

In Berserk, two political parties vie for control of the country. Each political party, when it is not in power, has a tendency to call general strikes to influence the policy of the ruling party. Evaluate this strategy in the context of a multiple-period game. Is it possible, in this situation, that a multiple-period game reduces, rather than enhances, social well-being? What would have to happen in this game to improve social welfare if a tit-for-tat strategy is used?

Accepted Answer

The multi-period game is likely to follo...

Question 16

In a particular town,Xpressdata and Blazedata are the only two providers of wireless Internet service.What do Xpressdata and Blazedata constitute

Accepted Answer

A)  a duopoly, whether they collude or not
B)  a cartel, whether they collude or not
C)  a Nash industry, whether they collude or not
D)  a monopolistically competitive industry, whether they collude or notE) B) and C)
F) A) and D)

Question 17

What do dominant strategies in a two-person game often lead to

Accepted Answer

A)  a less-preferred outcome for both players
B)  the best possible outcome for both players
C)  one person gaining advantage at the expense of the other person
D)  the worst possible outcomes for both playersE) All of the above
F) C) and D)

Question 18

Scenario 17-1
Assume that the countries of Irun and Urun are the only two producers of crude oil.Further assume that both countries have entered into an agreement to maintain certain production levels in order to maximize profits.In the world market for oil, the demand curve is downward sloping.
-Refer to Scenario 17-1.In a nonrepetitive game,what is the dominant strategy of Irun when production levels are in accordance with the collusive agreement

Accepted Answer

A)  increase production only after Urun increases production
B)  decrease production only after Urun increases production
C)  unilaterally decrease production
D)  unilaterally increase productionE) A) and D)
F) C) and D)

Question 19

As the number of firms in an oligopoly market grows larger,what will the price approach

Accepted Answer

A)  marginal cost
B)  average variable cost
C)  zero
D)  the monopoly priceE) A) and B)
F) All of the above

Question 20

Explain how the output effect and the price effect influence the production decision of the individual oligopolist.

Accepted Answer

Since the individual oligopolist faces a...

Exam 17: Oligopoly

What did the Competition Act define a cooperative agreement to be

Correct Answer
verified

As the number of firms in an oligopoly market grows larger,what will the price approach

Correct Answer
verified

Correct Answer
verified
The answer should show that if both shoe...
View Answer

Which of the following does NOT explain why oligopolies often fail to maintain cooperation

Correct Answer
verified

Correct Answer
verified

What do dominant strategies in a two-person game often lead to

Correct Answer
verified

Total profit for all firms in an oligopolistic market is greater than that of a monopolist,assuming no price-fixing occurs in the market.

Correct Answer
verified

As a group,how would oligopolists generally be better off

Correct Answer
verified

Oligopolies would like to act like which of the following

Correct Answer
verified

Like monopolists,what do oligopolists know about the result of an increase in the quantity of output

Correct Answer
verified

How are oligopolists generally best off,in terms of their profits

Correct Answer
verified

One way that public policy encourages cooperation among oligopolists is through common law.

Correct Answer
verified

Evaluate economic welfare under oligopolistic competition.

Correct Answer
verified
In the case of oligopolists trying to ma...
View Answer

What is the basic characteristic of a market that is characterized by imperfect competition

Correct Answer
verified

In a particular town,Xpressdata and Blazedata are the only two providers of wireless Internet service.What do Xpressdata and Blazedata constitute

Correct Answer
verified

The game that monopolists play in trying to reach the monopoly outcome is similar to the game that the two prisoners play in the prisoners' dilemma.

Correct Answer
verified

Explain how the output effect and the price effect influence the production decision of the individual oligopolist.

Correct Answer
verified
Since the individual oligopolist faces a...
View Answer

How do equilibrium prices in markets characterized by oligopoly compare with those in monopolies and perfectly competitive markets

Correct Answer
verified

Oligopolies can end up looking like competitive markets if the number and behaviour of firms is which of the following

Correct Answer
verified

Correct Answer
verified
The multi-period game is likely to follo...
View Answer

Exam 17: Oligopoly

What did the Competition Act define a cooperative agreement to be

Correct AnswerverifiedShow Answer

As the number of firms in an oligopoly market grows larger,what will the price approach

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe answer should show that if both shoe...View AnswerShow Answer

Which of the following does NOT explain why oligopolies often fail to maintain cooperation

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What do dominant strategies in a two-person game often lead to

Correct AnswerverifiedShow Answer

Total profit for all firms in an oligopolistic market is greater than that of a monopolist,assuming no price-fixing occurs in the market.

Correct AnswerverifiedShow Answer

As a group,how would oligopolists generally be better off

Correct AnswerverifiedShow Answer

Oligopolies would like to act like which of the following

Correct AnswerverifiedShow Answer

Like monopolists,what do oligopolists know about the result of an increase in the quantity of output

Correct AnswerverifiedShow Answer

How are oligopolists generally best off,in terms of their profits

Correct AnswerverifiedShow Answer

One way that public policy encourages cooperation among oligopolists is through common law.

Correct AnswerverifiedShow Answer

Evaluate economic welfare under oligopolistic competition.

Correct AnswerverifiedIn the case of oligopolists trying to ma...View AnswerShow Answer

What is the basic characteristic of a market that is characterized by imperfect competition

Correct AnswerverifiedShow Answer

In a particular town,Xpressdata and Blazedata are the only two providers of wireless Internet service.What do Xpressdata and Blazedata constitute

Correct AnswerverifiedShow Answer

The game that monopolists play in trying to reach the monopoly outcome is similar to the game that the two prisoners play in the prisoners' dilemma.

Correct AnswerverifiedShow Answer

Explain how the output effect and the price effect influence the production decision of the individual oligopolist.

Correct AnswerverifiedSince the individual oligopolist faces a...View AnswerShow Answer

How do equilibrium prices in markets characterized by oligopoly compare with those in monopolies and perfectly competitive markets

Correct AnswerverifiedShow Answer

Oligopolies can end up looking like competitive markets if the number and behaviour of firms is which of the following

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe multi-period game is likely to follo...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The answer should show that if both shoe...
View 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
In the case of oligopolists trying to ma...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Since the individual oligopolist faces a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The multi-period game is likely to follo...
View Answer