micro final
Which of the following is an example of an oligopoly?
The market for premium apparels
Which of the following firms is most likely to have a constant marginal cost?
a firm that has extremely high fixed costs
Which of the following is true of a nash equilibrium?
a game can have only one Nash equilibrium
If a monopolist decides to charge a higher price for its product, it will yield:
a higher revenue per unit sold but a lower number of units sold
Which of the following statements is true?
a monopolist can increase the price of its product and not lose all of its business
which of the following statements is true of a monopolists supply curve?
a monopolist does not have a supply curve.
Which of the following firms is likely to have the highest market power?
a monopoly
Which of the following market structures has the highest market concentration?
a monopoly
The market outcome in a duopoly with homogeneous products is similar to that in --------.
a perfectly competitive market
The first mover in an extensive-form game should use ------- to win the game.
backward induction
Compared to a firm under perfect competition, a monopolist:
charges more and produces less
compared to a firm under perfect competition, a monopolist:
charges more and produces less
There are a few firms in the automobile industry in Portland. In order to prevent a price war, these firms have secretly agreed to charge a price of 20% above the marginal cost of production. This is an example of -------.
collusion
collusion occurs when firms ------.
conspire to set the quantity they produce or the prices they charge
A strategy is called a mixed strategy if involves choosing ------.
different actions randomly
Third-degree price discrimination occurs when:
different groups of consumers are charged different prices
Goods that are similar but are not perfect substitutes are called -------- goods.
differentiated
Which of the following is a feature of an oligopoly market?
each firm's actions affects the decisions of its rival.
A nash equilibrium occurs if -------.
each player chooses strategies that are mutual best responses
a nash equilibrium occurs if -------.
each player chooses strategies that are mutual best responses
Which of the following statements is true?
economies of scale act as barriers to entry into a market
The Herfindahl-Hirschman Index is used to -------.
estimate the degree of competition in an industry
Which of the following is a difference between an oligopoly model with homogeneous products and a monopoly?
firms in an oligopoly with homogeneous products face stiff competition from its rivals, while there is no competition in a monopoly.
A ------- is an extensive-form representation of a game.
game tree
In an extensive-form game, payoff to a player is usually higher if -------.
he is the first mover
A firm is said to have market power if it charges a price -------- of production.
higher than the marginal cost
The -------- the Herfindahl-Hirschman Index, the ------.
higher; more concentrated the industry
Oligopolists merge to --------.
increase market power
Economies of scale in production act as a source of:
natural market power
If a monopolist owns or controls a key resource necessary for production, it is a source of:
natural market power
------- is the market structure in which there are a few rival firms.
oligopoly
There are a few ship manufacturers in Polonia and each firm faces a downward sloping demand curve. The ship-building industry in Polonia is an example of a --------.
oligopoly
A strategy is called a pure strategy if it involves choosing -------.
one particular action for a situation
In a zero-sum game, -------.
one player's loss is another players gain
A best response is -------.
one player's optimal action choice taking the other player's action as given
A -------- Is the privilege granted to an individual or company by the government, which gives them the sole right to produce and sell a good.
patent
In which of the four market structures do sellers act as price takers?
perfect competition
Which of the following market structures provides efficient outcomes?
perfect competition
social surplus is maximized in a ------.
perfectly competitive market
A game is called a simultaneous move game if -------.
players choose their actions at the same time
In comparison to firms in other market structures, monopolists:
produce goods that do not have close substitutes
Which of the following statements correctly identifies a similarity between monopoly and perfect competition?
production is expanded until marginal revenue equals marginal cost in both the market structures.
A player has a dominant strategy when :
she has only one best response to every possible strategy of the other player.
The prisoners' dilemma is an example of a ------ game.
simultaneous move
If a monopoly engages in first-degree price discrimination:
social surplus is maximized
Game theory is the study of:
strategic interactions
a ------- is a complete plan describing how a player will act
strategy
Which of the following is an example of differentiated goods?
tea and energy drinks
Which of the following helps in preventing firms in the US from forming collusive agreements?
the antitrust policy of the government
Which of the following is a similarity between a monopoly and an oligopoly with differentiated products?
the long-run equilibrium price in both markets exceeds marginal cost
which of the following is an example of a monopolistically competitive market?
the market for shampoo
A collusion breaks down if --------.
A firm charges a price lower than the price set by the other colluding firms.
Which of the following is true of a duopoly with differentiated products?
A firm does not lose all its customers when its rival lowers the price of its product
A nash equilibrium is that:
Firm A selects a low advertising budget and firm B selects a high advertising budget
Which of the following statements is true?
Firms in a market with entry barriers are likely to have more market power than firms in a market with no entry barriers.
Which of the following is true of a payoff matrix
It takes into account all relevant costs and benefits associated with each action of the players.
La Dila and Swiss Pro are the only two firms in an industry. The firms initially charge equal prices for their products, which are perfect substitutes. What happens if La Dilators decides to lower its price slightly?
La dila will face the entire market demand
In an oligopoly with differentiated products, firms
Make positive economic profits
The pricing rule for a monopolist is :
P > MR = MC
A collusion can work if ------.
a colluder values future monopoly profits more than current profits
Which of the following is true of an extensive-form game?
it involves sequential decision making by the players
Price discrimination is never perfect because:
it is impossible to know consumers' willingness to pay.
The profit earned by a monopolistic competitor after the entry of new firms is --------.
lower than the profit earned by the firm before the entry of new firms
The quantity produced in a monopolistically competitive market is ------ than the quantity produced in a perfectly competitive market, and the price charged in a monopolistically competitive market is ----- than the price charged in a perfectly competitive market.
lower, higher
A profit-maximizing monopolistic competitor continues production until -------.
marginal revenue equals marginal cost
At the profit-maximizing level of production of a monopolist:
marginal revenue equals marginal cost
----- is the market structure in which there are many rival firms producing differentiated products.
monopolistic competition
At a certain level of production, the marginal revenue and marginal cost of a monopolist are $8 and $6 respectively. which of the following statements is true in this context?
the monopolist should expand production
In a duopoly with homogeneous products, the best response of a firm is to charge a lower price than its rival as long as -------.
the rival's price is above marginal cost
a network externality refers to a situation where:
the value of a product increases as more consumers start to use it
A certain amusement park offers a 50 percent discount to kids between the ages of 8 and 14 years. this is an example of:
third-degree price discrimination
a monopolistic competitor exits the industry in the long run if -------.
total costs exceed total revenue
Which of the following statements is true??
under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs
Which of the following statements is true?
under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.
The optimal strategy of a goalie in penalty kicking is similar to that in a -------.
zero-sum game
