final micro

of the following scenarios, which would cause a movement along a demand curve?

ford increases the price of the explorer

Which of the following products is likely to be the MOST differentiated?

garments sold to a retail customer

Which of these is NOT an example of price discrimination?

gas stations charging more for gasoline with higher octane and additional additives

boeing and aribus can either comply with a cartel agreement or cheat. If boeing cheats on the cartel agreement and airbus complies with the agreement, boeing's profit is: Airbus cheat comply cheat $0,$0 $3 mill, -$1 mill boeing: comply -$1 mil, $3 mil $2 mil, $2 mil

3 million

A four-firm industry with market shares equal to 40, 30, 20, and 10, respectively, would have a Herfindahl-Hirschman Index of:

3000

Which of the following is NOT a requirement for successful price discrimination?

Sellers must sell a product that has a high profit margin.

Which one of the following industries or firms would be an example of natural monopoly?

a residential electric company

at a $1 apiece, 50 students want to buy a cheeseburger but the only burger joint around is willing to produce 20 cheeseburgers for $1. this is an example of?

a shortage

An example of x-inefficiency is:

an executive, at the corporation's expense, hiring a limousine to drive him one block whenever it is raining

A monopolist will shut down when _________in the long run and _________in the short run.

MR = MC.

under monopolistic competition, entry typically causes price to ______ and profits to _______.

decrease, decrease

in the following game table representing airfare pricing between delta and jet blue, what is the nash equilibrium? jet blue high low delta high 700, 100 600, 200 low 550, 70 500, 80

delta = high, jet blue = low

___________________ is the goods and services people want and can afford

demand

for a monoplistically competitive firm, the firm's demand curve is:

downward sloping

which of the following characteristics does not describe an oligopoly?

economic profits are zero in the long run

Marginal revenue is:

equal to the change in total revenue derived from the sale of one additional unit.

which of the following is not a characteristic of a monopolistically competitive market?

firms must take the market price as given

When a company is able to secure all the total surplus in a market for itself, which type of price discrimination is it practicing?

first degree

Product differentiation can be the result of all of the following EXCEPT:

higher profit margin

Compared with competitive markets, monopolies charge ______ prices and produce a ______ output.

higher, lower

if the price of stamps increases 20% and the quantity demanded decreases by 10% what type of demand are stamps?

inelastic

For regulating a natural monopoly, the marginal cost pricing rule

is not often used in the United States.

when firms are willing to match price sales of their competitors, but not their price increases, this results in a:

kinked demand curve

compared with a competitive market, a cartel as a whole will produce:

less output in order to increase prices

HH gregg and best buy are competing for sales for its new DVD player. Each has a pricing strategy of either a 'high' or 'low' price. Profits for each store are listed in the payoff boxes. The nash equilibrium for this game is: HHGregg high low high 100,100 30,102 BestBuy low 120, 30 50,50

low, low= (50, 50)

A firm that is the only seller of a good with no close substitutes is a(n):

monopolist

if there are many firms in an industry producing goods that are similar but slightly different, this is an example of:

monopolistic competition

Which of the following is a trembling hand trigger strategy?

not doing anything the first time an enemy attacks and waiting to see what it will do next

The basic setup of a "game" requires which set of components?

players, information, strategies, outcomes, and payoffs

A monopolistic competitor is like a perfectly competitive firm in the long run because:

both firms will earn a normal profit

The success rate of cartels is low because

cheating is likely to occur due to profitability.

The _____ measures the share of industry sales controlled by the industry's largest firms.

concentration ratio

total surplus is

consumer surplus + producer surplus

The reason a monopoly imposes a deadweight loss on society is that:

consumers are denied output for which they are willing to pay more than the cost of producing it.

Because of the relative ease of developing new operating systems, a company with significant market power, such as Microsoft, may charge less for their product to ward off potential rivals. What is this an example of?

contestable market

A right that gives individuals or firms certain types of intellectual property for a period of time is called a:

copyright

marginal cost is the _________.

cost of producing one more good

Firms hiring lobbyists to keep out new entrants and avoid competition is an example of:

rent seeking

Metropolitan Power and Light is a monopoly in the electrical generation and distribution industry. It has spent a tremendous amount of money in lobbying efforts to limit the number of permits granted for wind and solar power generators. The company fears that these generators will create competition in the market. This lobbying effort is an example of:

rent seeking

Chess and Tic-Tac-Toe are examples of

sequential-move games.

finn and jake are selling swords in a perfectly competitive market and they haven't been able to earn profit. what would you suggest they do?

shut down

what is similar between a monoploist and a producer in a perfectly competitive market in regards to their production strategy?

the quantity they produce is where MR=MC

All oligopoly models share several assumptions. Which of the following is among them?

there are significant barriers to entry

a strategy in which a firm takes the same action that the other firm did in the last period is a:

tit-for-tat strategy

Which of these is a type of strategy used in a repeated game?

trigger strategies

Metropolitan Power and Light is a monopoly in the electrical generation and distribution industry. Since it does not face any competition in its industry, it has become quite lax in research and development and has not made any improvements to its efficiency. It also spends lavishly on its corporate retreats because it has a high level of guaranteed profits every year. Its actions are an example of:

x inefficiency

When after a game ends and one participant's gains have come at the expense of the other participants, it is described as a:

zero sum game

An industry made up of three firms with market shares of 50%, 40%, and 10%, respectively, has a Herfindahl-Hirschman Index of:

4200

Suppose that a monopolist is selling 100 units of a product at a price of $20 each. If the average total cost (ATC) at this level of output is $15, how much total economic profit is the firm earning?

500 $5 per unit times 100 units or $500.

Suppose that a monopolist is selling 35 units of a product at a price of $30 each. If the average variable cost at this level of output is $5 and the average fixed cost at this level of output is $5, how much total economic profit is the firm earning?

700 $20 per unit times 35 units, or $700.

Which is NOT a part of a basic setup to a "game"?

a judge

When a company is able to charge different amounts for different blocks of consumption, which type of price discrimination is it practicing?

second degree

In 1890, Congress passed the first antitrust act, called the

sherman act

with the flu season approaching, the government wants tissue producers to produce more tissues, and decrease the taxes on the producers. What will happen to the tissue market?

supply will increase, causing price to decrease and quantity to increase

Suppose a monopolist faces the demand relationship shown in the table. Marginal revenue for the second unit of output is: QD: P: 1 $10 2 $8 3 $7 4 $5 5 $3 6 $2

$6

What is the marginal utility of consuming the 2nd donut? Quantity: Total utility: 0 0 1 18 2 28 3 36

10

the cross elasticity of glass and plastic is 1.25 if the price of glass increased by 12% what was the percent change in the quantity demanded of plastic?

15%

The ____ measures industry concentration using all of the firms in an industry.

Herfindahl-Hirschman Index

How do monopolistically competitive firms DIFFER from monopolies?

Monopolistically competitive firms have more elastic demand curves. Monopolistically competitive firms have more elastic demand curves than monopolies because there are close substitutes for their products.

patents

Patents are extended to firms and individuals who invent new products and processes. The patent holder is protected for a limited time from competition in the production of the patented product, and an unauthorized user can be sued for patent infringement. Kodak accused Apple of infringing upon a patent having to do with previewing image technology. Apple alleged that Kodak infringed upon two of its patents for the creation of digital cameras.

_____ and _____ earn zero economic profits in the long run.

Perfect competition; monopolistic competition

rent seeking

Rent seeking occurs when a monopoly uses its resources to protect its position. This includes such activities as lobbying, extending patents, and restricting the number of licenses permitted.

The key to monopoly power is significant __________ in the industry.

barriers to entry

Which of the following is a characteristic of a monopoly firm?

barriers to entry

Boeing and airbus can either comply with a cartel agreement or cheat. if this game is only played once, and each firm plays rationally, Airbus cheat comply boeing cheat $0, $0 $3 mil, -$1 mil comply -$1 mil, $3 mil $2 mil, $2 mil

both boeing and airbus will cheat

In the Prisoner's Dilemma, if the prisoners could collude:

both prisoners would be better off not confessing.

When oligopolies act jointly as a monopoly, they are acting as a:

cartel

Which of these is an example of third-degree price discrimination?

charging airline business passengers and regular travelers different prices

Assume that this Friday you would like to go to the club. You ask your friends to go with you, but they all want to go to the movies. Despite your friends not wanting to go with you, you decide to go to the club anyway because you really want to go dancing. This type of thinking BEST resembles a:

dominant strategy

capital, as defined by economists, includes what?

manufactured products

If consumers believe that an extremely hot summer is approaching and more purchase fans, what will happen to the fan market?

Price and quantity increase

A solution or best-response to a situation that depends on what is MOST "obvious" and is used in situations in which there is more than one Nash equilibrium is called a:

focal point

The demand curve facing a monopoly firm is:

equivalent to the market demand curve.

The _____ strategy is subject to misreading and can quickly lead to the unfavorable Prisoner's Dilemma result.

grim trigger

IN which situation can a prisoners dilemma outcome most likely be avoided?

if the game is repeated over and over under the same conditions

Compared to the demand curve for a firm in perfect competition, the demand curve for a monopolistically competitive firm:

is more

If a monopoly firm sells more than one unit, marginal revenue will then be:

less than the price

in general, the market price in an oligopoly market where there is no collusion is:

lower than in a monopoly market

_________ occur(s) when a firm has some control over price.

market power

Neither a monopoly nor a perfectly competitive firm

maximize profit when MR < MC.

Both a monopoly and a perfectly competitive firm:

maximize profit when MR = MC.

Focal-point strategies are typically used when there is:

more than one nash equilibrium

Which of these is a characteristic of an oligopoly market structure?

mutual interdependence

A(n) _____ occurs when all players in a game use an optimal strategy in response to all other players' strategies.

nash equilibrium

when all player within a game maximize their expected outcome given the information they have, this is called a:

nash equilibrium

Suppose that a sole producer can earn economic profits if it produces a certain output, but that the addition of a second producer would eliminate economic profits for both firms. This is a case of:

natural monopoly

why does the demand curve slope downward?

people prefer paying less to paying more

Under which market structure does a firm face a horizontal demand curve?

perfect competition

gail wishes to sell onions she grew in her garden at the farmers market. what type of market would she be competing in?

perfect competition

If Tire Guy Tommy negotiates a separate deal with each customer, Tommy is engaging in:

perfect price discrimination

in order to make automakers more competitive, the government decides to stop taxing automakers. what changes take place to the equilibrium price and quantity of vehicles?

price decreases, quantity increases

Which of the following is not a characteristic of a monopoly?

price taker

Joe's Diner and Bev's Drive Thru, two competing restaurants, are considering whether or not to advertise. Each cell in the following table shows Bev's payoffs on the left and Joe's on the right, depending on their decisions. They play only once, choose at the same time, and have perfect information about the payoffs. Which type of game is this?

prisoner's dilemma

The market price in a monopoly market is $15 and 2,000 units are bought and sold. Assume the market becomes perfectly competitive. What would you expect to happen to the number of units bought and sold?

rise above 2000 units

Monopolistically competitive firms have market power because:

they engage in product differentiation. The market power in monopolistic competition arises from product differentiation; the monopolistically competitive industry is otherwise very similar to competition.

When a company is able to charge different groups of people different prices, which type of price discrimination is it practicing?

third degree

Price discrimination that involves charging different consumer groups a different price is:

third degree price discrimination

The notion that individuals and firms are compelled to retaliate or punish others for engaging in noncooperative actions, but leaving the door open for future reconciliation, is BEST referred to as a(n):

tit for tat strategy