Filters
Question type
Study Flashcards

Table 11-6 Table 11-6 Suppose OPEC has only two producers,Saudi Arabia and Nigeria.Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria.The payoff matrix in Table 11-6 shows the profits earned per day by each country. Low output corresponds to producing the OPEC assigned quota and high output corresponds to producing the maximum capacity beyond the assigned quota. -Refer to Table 11-6.Is there a dominant strategy for Saudi Arabia and,if so,what is it? A) Yes,the dominant strategy is to produce a high output. B) Yes,the dominant strategy is to produce a low output. C) No,there is no dominant strategy. D) Yes,it has a dominant strategy depending on what Nigeria does. Suppose OPEC has only two producers,Saudi Arabia and Nigeria.Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria.The payoff matrix in Table 11-6 shows the profits earned per day by each country."Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota. -Refer to Table 11-6.Is there a dominant strategy for Saudi Arabia and,if so,what is it?


A) Yes,the dominant strategy is to produce a high output.
B) Yes,the dominant strategy is to produce a low output.
C) No,there is no dominant strategy.
D) Yes,it has a dominant strategy depending on what Nigeria does.

Correct Answer

verifed

verified

If the painting firms in a city sign a contract outlining a pricing plan,they are involved in


A) price competition.
B) a legal form of business contract in the United States.
C) collusion.
D) price regulation.

Correct Answer

verifed

verified

Producing a homogeneous product occurs in which of the following industries?


A) oligopoly,monopolistic competition and perfect competition
B) perfect competition only
C) oligopoly and perfect competition
D) monopolistic competition and perfect competition

Correct Answer

verifed

verified

An oligopolistic industry is characterized by a few large firms acting independently.

Correct Answer

verifed

verified

An oligopolistic industry is characterized by all of the following except


A) existence of entry barriers.
B) the possibility of reaping long run economic profits.
C) firms pursuing aggressive business strategies,independent of rivals' strategies.
D) production of standardized products.

Correct Answer

verifed

verified

Figure 11-8 Figure 11-8 -Refer to Figure 11-8.Assume Starbucks is successful with its new health and wellness stores,and as a result it is able to earn economic profits.Which of the graphs in the figure above reflects this? A) Panel A B) Panel B C) Panel C D) either Panel A or Panel B -Refer to Figure 11-8.Assume Starbucks is successful with its new health and wellness stores,and as a result it is able to earn economic profits.Which of the graphs in the figure above reflects this?


A) Panel A
B) Panel B
C) Panel C
D) either Panel A or Panel B

Correct Answer

verifed

verified

A monopolistically competitive firm faces a downward-sloping demand curve because


A) it is able to control price and quantity demanded.
B) there are few substitutes for its product.
C) of product differentiation.
D) its market decisions are affected by the decisions of its rivals.

Correct Answer

verifed

verified

Table 11-2 Table 11-2 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On.Table 11-2 shows the firm's demand and cost schedules. -Refer to Table 11-2.What is Eco Energy's profit? A) $125 B) $140 C) $145 D) $150 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On.Table 11-2 shows the firm's demand and cost schedules. -Refer to Table 11-2.What is Eco Energy's profit?


A) $125
B) $140
C) $145
D) $150

Correct Answer

verifed

verified

A member of a cartel earns more profits by producing more than its quota and selling at a price higher than the cartel's price.

Correct Answer

verifed

verified

Table 11-4 Table 11-4 Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow.Each firm must decide on whether to increase its advertising spending to compete for customers.Table 11-4 shows the payoff matrix for this advertising game. -Refer to Table 11-4.Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $6,000 and Star Connections earns a profit of $12,000.Is there an incentive for any one firm to increase its advertising budget? A) No,neither firm has an incentive to raise its advertising spending. B) Yes,both firms have an incentive to raise their advertising budgets. C) Yes,Star Connections has an incentive to increase its advertising budget,but Godrickporter does not. D) Yes,Godrickporter has an incentive to increase its advertising budget,but Star Connections does not. Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow.Each firm must decide on whether to increase its advertising spending to compete for customers.Table 11-4 shows the payoff matrix for this advertising game. -Refer to Table 11-4.Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $6,000 and Star Connections earns a profit of $12,000.Is there an incentive for any one firm to increase its advertising budget?


A) No,neither firm has an incentive to raise its advertising spending.
B) Yes,both firms have an incentive to raise their advertising budgets.
C) Yes,Star Connections has an incentive to increase its advertising budget,but Godrickporter does not.
D) Yes,Godrickporter has an incentive to increase its advertising budget,but Star Connections does not.

Correct Answer

verifed

verified

Figure 11-12 Figure 11-12 -Refer to Figure 11-12.The diagram demonstrates that A) in the short run,the monopolistic competitor produces an output Qb but in the long run after it adjusts its capacity,it will produce the allocatively efficient output,Qa. B) it is not possible for a monopolistic competitor to produce the productively efficient output level,Qa,because of product differentiation. C) it is possible for a monopolistic competitor to produce the productively efficient output level,Qa,if it is willing to lower its price from Pb to Pa. D) in the long run,the monopolistic competitor produces the minimum-cost output level,Qa,but in the short run its output of Qb is not cost minimizing. -Refer to Figure 11-12.The diagram demonstrates that


A) in the short run,the monopolistic competitor produces an output Qb but in the long run after it adjusts its capacity,it will produce the allocatively efficient output,Qa.
B) it is not possible for a monopolistic competitor to produce the productively efficient output level,Qa,because of product differentiation.
C) it is possible for a monopolistic competitor to produce the productively efficient output level,Qa,if it is willing to lower its price from Pb to Pa.
D) in the long run,the monopolistic competitor produces the minimum-cost output level,Qa,but in the short run its output of Qb is not cost minimizing.

Correct Answer

verifed

verified

If an industry is made up of five identical firms,the four-firm concentration ratio is


A) 5%.
B) 20%.
C) 80%.
D) 100%.

Correct Answer

verifed

verified

What is an oligopoly? Give two examples of oligopolistic industries in the United States.

Correct Answer

verifed

verified

Oligopoly is a market structur...

View Answer

Is a monopolistically competitive firm productively efficient?


A) No,because it does not produce at minimum average total cost.
B) Yes,because it produces where marginal cost equals marginal revenue.
C) No,because price is greater than marginal cost.
D) Yes,because price equals average total cost.

Correct Answer

verifed

verified

Figure 11-3 Figure 11-3 Figure 11-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 11-3.What is the area that represents the total fixed cost of production? A) 0P<sub>1</sub>aQ<sub>a</sub> B) P<sub>0</sub>adP<sub>3</sub> C) P<sub>1</sub>bdP<sub>3</sub> D) That information cannot be determined from the graph. Figure 11-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 11-3.What is the area that represents the total fixed cost of production?


A) 0P1aQa
B) P0adP3
C) P1bdP3
D) That information cannot be determined from the graph.

Correct Answer

verifed

verified

Figure 11-3 Figure 11-3 Figure 11-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 11-3.Should the firm represented in the diagram continue to stay in business despite its losses? A) No,it should shut down. B) Yes,its total revenue covers its variable cost. C) No,it is not able to cover its fixed cost. D) Yes,it should increase its revenue by raising its price. Figure 11-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 11-3.Should the firm represented in the diagram continue to stay in business despite its losses?


A) No,it should shut down.
B) Yes,its total revenue covers its variable cost.
C) No,it is not able to cover its fixed cost.
D) Yes,it should increase its revenue by raising its price.

Correct Answer

verifed

verified

Which of the following is not a reason why government officials are willing to impose entry barriers?


A) to raise revenue
B) to encourage innovation which may improve the standard of living in the long run
C) to increase economic efficiency
D) to promote an equitable distribution of income

Correct Answer

verifed

verified

On November 7,1996,the Distilled Spirits Council of the United States decided to end its voluntary ban on television and radio liquor advertisement.The ban on hard liquor advertising had been in effect since 1936 for radio and 1948 for television.Did the lifting of this ban likely increase or decrease the profits of hard liquor companies? Briefly explain.

Correct Answer

verifed

verified

If advertising is a prisoners'...

View Answer

How does the long run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry?


A) A firm in monopolistic competition will earn economic profits but a firm in perfect competition earns zero profit.
B) A firm in monopolistic competition will charge a price higher than the average cost of production but a firm in perfect competition charges a price equal to the average cost of production.
C) A firm in monopolistic competition does not take full advantage of its economies of scale but a firm in perfect competition produces at the lowest average cost possible.
D) A firm in monopolistic competition produces an allocatively efficient output level while a firm in perfect competition produces a productively efficient output level.

Correct Answer

verifed

verified

The key characteristics of a monopolistically competitive market structure include


A) many small (relative to the total market) sellers acting independently.
B) all sellers sell a homogeneous product.
C) barriers to entry are strong.
D) sellers have no incentive to advertise their products.

Correct Answer

verifed

verified

Showing 21 - 40 of 200

Related Exams

Exam 1

Economics: Foundations and Models

145 Questions

Exam 2

Trade-Offs, comparative Advantage, and the Market System

151 Questions

Exam 3

Where Prices Come From: the Interaction of Demand and Supply

149 Questions

Exam 4

Market Efficiency and Market Failure

171 Questions

Exam 5

The Economics of Health Care

117 Questions

Exam 6

Firms, the Stock Market, and Corporate Governance

126 Questions

Exam 7

Consumer Choice and Elasticity

193 Questions

Exam 8

Technology,production,and Costs

147 Questions

Exam 9

Firms in Perfectly Competitive Markets

153 Questions

Exam 10

Monopoly and Antitrust Policy

148 Questions

Exam 12

GDP: Measuring Total Production and Income

135 Questions

Exam 13

Unemployment and Inflation

148 Questions

Exam 14

Economic Growth, the Financial System, and Business Cycles

130 Questions

Exam 15

Aggregate Demand and Aggregate Supply Analysis

145 Questions

Exam 16

Money, banks, and the Federal Reserve System

144 Questions

Exam 17

Monetary Policy

145 Questions

Exam 18

Fiscal Policy

143 Questions

Exam 19

Comparative Advantage,international Trade,and Exchange Rates

158 Questions

Show Answer