Final
A monopolistically competitive firm continues to make profits so long as P>AC T/F
True
Network industries that are contestable usually perform better than uncontestable markets even if they are monopolies T/F
True
Without Government Support Cartels tend to break down over time T/F
True
Which goods represent network goods?
Twitter, Microsoft Excel, Facebook.
A strategy that has a higher payoff than any other strategy no matter what the other player does is called a:
cartel strategy.
An agreement among firms to charge the same price or otherwise not to compete is referred to as:
collusion
The introduction of fun into a job ______ labor ______.
decreases; demand
The marginal product of labor _______________ as firm hires more workers. This can be explained by ____________.
decreases; law of diminishing returns.
Loyalty Plans lead too
higher prices
Monopolistically competitive firms set price
greater than marginal cost
A firm will hire workers as long as the marginal product of labor is.....
greater than the wage
A cartel is a:
group of suppliers that tries to act as if they were a monopoly.
You have been offered two different jobs requiring the same level of skill. Job 1 jobs has a higher risk of injury than job 2. You would expect job 1 to pay a _____________ wage than job 2. The difference in pay is called _______
higher; compensating differentials
A dominant strategy is a strategy that:
has a higher payoff than any other strategy, no matter what the other player does.
unstable and tend to lose market power over time.
of differences in working conditions.
Internet Dating services such as Match.com are in a market dominated by several large firms making the market an.....
oligopoly
A firm will hire a worker as long as:
the marginal product of labor is greater than or equal to the wage earned by the worker.
A network good's:
value to one consumer increases the more that other consumers use the good.
Markets tend to be more easily monopolized when
Fixed costs are high
A government supported cartel usually means.....
Higher prices
Monopolistic competitors products are usually _________Advertisted
Highly
Monopolistic competition is a....
market with a large number of firms selling similar but not identical products
Competition in the case of network goods is
"For the market"
Firms sometimes give away goods in hopes of...
Being the dominant standard.
Cartels collapse because of....
Cheating, New Entrants, Government Restrictions
Barriers of Entry
Control of key resources, Economies of Scale, Network Effects, Government Barriers
Strategic Decision Making
Decision making in situations that are interactive
The introduction of risk into a job_____labor____
Decreases, Supply
A monopolistic competitive firm produces a product like oil that has perfect substitutes T/F
False
Both perfectly competitive markets and monopolistically competitive markets feature product differentiation T/F
False
In the long run monopolistic competitive firms will end up producing at a price equal to that of competitive markets T/F
False
Most contestable markets have high fixed costs T/F
False
The Basic tendency of cartels is to increase output and decrease prices T/F
False
The wage gap between white males and other groups can be entirely explained by factors such as differences in education, differences in experience and differing preferences for jobs.
False
Their are NO government supported cartels in the US T/F?
False
To Maximize profits a firm will hire a worker when the _______ in revenue from hiring an additional worker_______ the workers wage
Increases, Is greater than
Qwerty is used today because it is.....
Locked in
Cartels have a large incentive to cheat by.....
Lowering prices and increasing production
As a result of the Department of Justice's lawsuit against Microsoft
Microsoft had an "intent to monopolize"
Network goods are usually sold by
Monopolies and Oligopolies
Monopolistic competition combines features of
Perfect competition and monopolies
A _________________ is a game in which pursuing dominant strategies results in noncooperation that leaves everyone worse off.
Prisoner's Dilemma
Game Theory is the study of
Strategic Decision Making
With Price Matching who benefits?
The Seller and the consumer pays a higher price
Contestable Markets tend to arise when
The incumbent firm does not control access to an important resource
Oligopolies
The product may be identical or differentiated there are a large number of potential buyers but only a few sellers there are barriers to entry
Prisoners Dilemma
The pursuit of individual interests leads to a group outcome that is in the interest of no one
Printers and Ink are typically
Tied
The NBA and NCAA are examples of:
a buyer's cartel, keeping the salaries of players lower than they would be in a competitive market.
A market contestable if
a competitor could credibly enter and take away business from the incumbent
OPEC
a group of oligopolistic producers that try to behave like a monopoly
Monopolistic competition
a market with a large number of firms selling similar but not identical products ie. Cereal, computers, shoes, clothing
example of a barrier to entry
a patent on a pharmaceutical drug One firm owns all of the required materials to produce a good. large economies of scale in production process. the local government designates one company to provide electricity to an area
Price in an oligopoly is likely to be....
below monopoly levels but above competitive levels
Arbitrage is ________ in one market and ________ in another market.
buying low; selling higher
How might unions benefit workers?
by demanding improved labor/management relations and improving worker safety and work conditions
Why do economists believe that employers that discriminate stand at a long-run disadvantage?
employers who discriminate pay an economic penalty.
Tacit Collusion occurs when firms
limit competition with one another but they do so without explicit agreement or communication
The Result of Microsoft antitrust case was to make Microsoft software....
more contestable
Pfizer sells Atgam in New Zealand for $14 per pill and in Brazil for $8 per pill. This implies that the demand curve in New Zealand must be ________ than in Brazil.
more inelastic
Perfectly competitive firms advertise
not at all
Economists call selling the same product at different prices to different customers:
price discrimination.
Oil producing countries agree to _________ output of oil. When production is reduced, the price of oil _______.
reduce; increases
Price discrimination can be defined as:
selling the same product at two different prices in two different markets.
Game theory is the study of:
strategic decision making.
If a company is considering hiring a new employee, they will compare the additional revenue it earns from hiring another worker to its increase in costs from paying that worker. The company should hire an additional employee if:
the additional revenue generated by the employee is greater than the employee's wage.
Cartels are:
unstable and tend to lose market power over time.
Statistical Discrimination
using information about group averages to make conclusions about individuals
You divide your time between two things- leisure and work. The opportunity cost of an hour of leisure is:
your hourly wage rate