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