Exam 4

Is best for the player, regardless of what strategies other players follow.

A dominant strategy is one that

The short run but not in the long run.

A firm operating in a monopolistically competitive market can earn economic profits in

Value of marginal product.

A workers contribution to a firms re[V]enue is measured directly by the workers

All of the above are correct.

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Collusion

An agreement among firms in a market about quantities to produce or prices to charge is called

Decline, and product diversity in the market increases.

As new firms ENTER a monopolistically competitive market, profits of exiting firms

Is always in their best interest to leave their quantities supplied unchanged.

Assuming that oligopolists do not have the opportunity to collude, once they have reached the Nash Equilibrium, it

Derived demand.

Because a firms demand for a factor of production is DERIVED from its decision to supply a good market, it is called

Increases, and equilibrium quantity of labor increases.

Considering the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage

C.

Figure 15-3. The marginal cost curve for a monopoly firm is depicted by curve

$240= (20*12)

Figure 15-6. A profit maximizing monopolist would earn total revenues of

$120 = (20-10)*12

Figure 15-6. A profit maximizing monopolist would incur total cost of

$20

Figure 15-6. In order to maximize profits, the monopolist should charge a price of

12 units.

Figure 15-6. In order to maximize profits, the monopolist should produce

Panel B.

Figure 16-4. Which of the graphs depicts a short run equilibrium that will encourage EXIT of some firms from a monopolistically competitive industry?

Panel C

Figure 16-4. Which of the graphs depicts a short run equilibrium that will encourage the ENTRY of other firms into a monopolistically competitive industry?

Price exceeds marginal cost.

For a monopolistically competitive firm, at the profit maximizing quantity of output,

Average revenue exceeds marginal revenue

For a monopoly

Oligopolies

Game theory is important for the understanding of

Make collusive arrangements easier to enforce.

Games that are played more than once generally

Both monopolistically competitive and perfectly competitive firms produce where P = ATC.

I'm the long run,

Exceeds the monopoly level of output, but falls short of the competitive level of output.

In a duopoly situation, the logic of self-interest results in a total output level that

Average revenue.

In a monopolistically competitive industry, a firms demand curve also represents its

Agree on the total level of production and on the amount produced by each member.

In order to be successful, a cartel must

Less than the efficient scale.

In the long run, a monopolistically competitive firm produces a quantity that is

All of the above are possible (positive economic profits, economic losses & zero economic profits)

In the short run, a firm operating in a monopolistically competitive market can earn

Monopoly firms but not for competitive firms.

Marginal revenue can beco[M]e negative for

Can maximize profits if the seller can prevent the resale of goods between customers.

Price discrimination

Is an attempt by a monopoly to INCREASE its profit by selling the same good to different customers of different prices.

Price discrimination

Differentiated product and charge a price ABOVE marginal cost.

Some firms have an incentive to advertise because they sell a

Less market power than it would otherwise have.

Suppose most people regard emeralds, rubies, and sapphires as a close substitute for diamonds. Then DeBeers, a large diamond company, has

Because the company would sell so few copies that they would earn higher profits by selling at a lower price.

The DeBeers company faces very little competition from other firms in the wholesale diamond market. Why isn't the price of the wholesale diamonds $10,000 per carat?

Human capital.

The accumulation of investments in people, such as education and on the job training, is known as

Produces an output level LESS than the socially optimal level.

The dead weight loss associated with a monopoly occurs because the monopolist

Sherman Act.

The first major piece of antitrust legislation was the

Barriers to entry.

The fundamental source of monopoly power is

Work and leisure.

The labor supply curve is fundamentally a representation of the trade off people face between which of the following?

Clayton Act.

The legislation passed by congress in 1914 to STRENGTHEN the governments powers and authorize private lawsuits was the

Both prisoners confess.

The likely outcome of the standard prisoners dilemma game is that

Output per additional unit of labor.

The marginal product of labor is defined as the change in

B

The marginal revenue curve for a monopoly firm is depicted by curve

Diminishing marginal product.

The negative slope of the value of marginal product curve is most easily explained by

It identifies the fundamental difficulty in maintaining cooperative agreements.

The prisoners dilemma is an important game to study because

Duopoly.

The simplest type of oligopoly is

Monopolistic competition and Oligopoly

The two types of imperfectly competitive markets are

Value of marginal product curve and the wage line.

To maximize profit, a competitive firm hires workers up to the point of intersection of the

Decreases, and the value of the marginal product of labor decreases.

Typically, as a firm hires additional workers, the marginal product of labor

Constrained by demand.

When a firm operates under conditions of monopoly, it's price is

Quantity demanded declines but not by zero

When a monopolistically competitive firm raises its price,

It's demand curve will be tangent to its average total cost curve.

When a profit maximizing firm in a monopolistically competitive market IS PRODUCING the long run equilibrium quantity,

A firm will have chosen its best strategy, given the strategies chosen by other firms in the market.

When an oligopoly market reaches a Nash equilibrium

ATC = demand and MR = MC

Which of the following conditions is characteristic of a monopolistically competitive firm in long run equilibrium?

Rhianna obtains a copyright for a short story that she wrote and published.

Which of the following is an example of a barrier to entry?

A difference in pay due to nonmonetary characteristics of jobs.

A compensating differential is