|
1) In a cartel member firms may be given a fixed amount to produce. This is called a ? a. Limit b. Factor c. Quota d. Quotient
|
||||
|
2) Laws that make it illegal for firms to conspire to raise prices or reduce production are known as ? a. antimonopoly laws b. all of these answers c. anti-collusion laws d. pro-competition laws e. antitrust laws
|
||||
|
3) Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero marginal cost of study production. If ABC publishing engages in tying the two products its best strategy is to charge a combined price of ? a. Rs 60 b. Rs 90 c. Rs 85 d. Rs 75
|
||||
|
4) Collusion is difficult for an oligopoly to maintain ? a. all of these answers b. if additional firms enter of the oligopoly c. because antitrust laws (also known as competition laws) make collusion illegal d. because, in the case of oligopoly self-interest is in conflict with cooperation
|
||||
|
5) A situation in which oligopolists interacting with one another each choose their best strategy given the strategies that all the other oligopolists have chosen is known as a ? a. Nash equilibrium b. dominant strategy c. cartel d. collusion solution
|
||||
|
6) When a oligopolist individually chooses its level of production to maximize its profits it charges a price that is ? a. more than the price charged by either monopoly or a competitive market b. less than the price charged by either monopoly or a competitive market c. more than the price charged by a monopoly and less then the price charged by a competitive market d. less than the price charged by a monopoly and more than the price charged by a competitive market
|
||||
|
7) As the number of sellers in an oligopoly grows larger, an oligopolistic market looks more like ? a. monopoly b. a competitive market c. monopolistic competition d. a collusion solution
|
||||
|
8) If oligopolists engage in collusion and successfully from a cartel, the market outcome is ? a. the same as if it were served by competitive firms b. efficient because cooperation improves efficiency c. the same as if it were served by a monopoly d. known as a Nash equilibrium
|
||||
|
9) The market for hand tools (such as hammers and screwdrivers) is dominated by Draper Stanley, and Craftsman This market is best described as ? a. monopolistically competitive b. a monopoly c. an oligopoly d. competitive
|
||||
|
10) In cartels ? a. Each individual firm profit maximizes b. There may be an incentive to cheat c. The industry as a whole is loss making d. There is no need to police agreements
|
||||
|
11) Firms in oligopoly are likely to ? a. Invest heavily in branding b. Act independently of other firms c. Try to differentiate its products d. Try to be a price maker
|
||||
|
12) In Game Theory ? a. Firms are assumed to act independently b. Firms are assumed to cooperate with each other c. Firms collude as part of cartel d. Firms consider the actions of others before deciding what to do
|
||||
|
13) In the kinked Demand Curve theory it is assumed that ? a. An increase in price by the firm is not followed by others b. An increase in price by the firm is followed by others c. A decrease in price by the firm is followed by others d. Firms collude to fix the price
|
||||
|
14) If a few firms dominate an industry the market is known as ? a. monopolistic competition b. Competitively monopolistic c. Duopoly d. Oligopoly
|
||||
