Question 1

Firms are more likely to avoid a prisoner's dilemma when they interact repeatedly than when they rarely interact.

Accepted Answer

A) True 
 B)False

Question 2

A player chooses a maximin strategy to ________ gain the player can earn.

Accepted Answer

A)   minimize the minimum
B)   maximize the maximum
C)   maximize the minimum
D)   minimize the maximumE) C) and D)
F) A) and B)

Question 3

A form of oligopoly in which a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy is called

Accepted Answer

A)   the Cournot model.
B)   the contestable markets model.
C)   a cartel.
D)   the price-leadership model.E) C) and D)
F) All of the above

Question 4

A ________ occurs if all players in a game play their best strategies given what their competitors do.

Accepted Answer

A)   dominant strategy
B)   Nash equilibrium
C)   prisoner's dilemma
D)   tit-for-tat strategyE) A) and C)
F) None of the above

Question 5

Refer to the information provided in Table 14.3 below to answer the question that follows.
Table 14.3
B's Strategy
   Advertise  Don’t Advertise  A’s profit $ 200 million A’s profit $75 million  A’s Strategy  Advertise  B’s profit $ 75 million B’s profit $50 million  Don’t  A’s profit $50 million  A’s profit $100 million  B’s profit $200 B’s profit $100 Advertise  million  million \begin{array} { l l l l } & &  { 	ext { Advertise } } &  { 	ext { Don&#x27;t Advertise } } \\hline & & & 	ext { A&#x27;s profit \$ 200 million}\& & 	ext { A&#x27;s profit } \$ 75 	ext { million  } \	ext { A&#x27;s Strategy } & 	ext { Advertise } & 	ext { B&#x27;s profit  \$ 75 million }& 	ext {B&#x27;s profit } \$ 50 	ext { million } \& & & \&  	ext { Don&#x27;t } & 	ext { A&#x27;s profit } \$ 50 	ext { million } & 	ext { A&#x27;s profit } \$ 100 	ext { million } \& & 	ext { B&#x27;s profit } \$ 200 & 	ext { B&#x27;s profit } \$ 100 \& 	ext { Advertise } & 	ext { million } & 	ext { million } \\hline\end{array} A’s Strategy ​ Advertise  Don’t  Advertise ​ Advertise  A’s profit $75 million  B’s profit $ 75 million  A’s profit $50 million  B’s profit $200 million ​ Don’t Advertise  A’s profit $ 200 millionB’s profit $50 million  A’s profit $100 million  B’s profit $100 million ​​ 
-Refer to Table 14.3. The result of this game is known as a ________.

Accepted Answer

A)   prisoner's dilemma
B)   collusive outcome
C)   repeated strategy
D)   tit-for-tat outcome E) A) and B)
F) A) and C)

Question 6

Industries may be oligopolistic due to economies of scale.

Accepted Answer

A) True 
 B)False

Question 7

Which choice below is an argument that more technological change occurs in more competitive market structures?

Accepted Answer

A)   Most large, oligopolistic firms such as AT&T have done a great deal of research.
B)   Oligopolistic firms earn the profits to pay for research; competitive firms do not.
C)   Small firms are too "lean and mean" to support any research and development.
D)   The "high-tech revolution" grew out of many tiny start-up operations.E) All of the above
F) A) and D)

Question 8

The Herfindahl-Hirschman Index is

Accepted Answer

A)   calculated by summing the squared market share percentages for all firms in the industry.
B)   calculated as the sum of the market shares of the top four firms.
C)   calculated as the sum of the market shares for all firms in the industry.
D)   not used by the government in considering mergers.E) A) and B)
F) A) and C)

Question 9

In contestable markets, large oligopolistic firms end up behaving like

Accepted Answer

A)   monopolistically competitive firms.
B)   a monopoly.
C)   perfectly competitive firms.
D)   a cartel.E) A) and B)
F) A) and C)

Question 10

The economist Joseph Schumpeter argued that industrial concentration, in which a relatively small number of firms control the market place, actually ________ the rate of ________.

Accepted Answer

A)   increased; market competitiveness
B)   increased; technological advance
C)   decreased; market competitiveness
D)   decreased; technological advanceE) None of the above
F) B) and C)

Exam 14: Oligopoly

In contestable markets, large oligopolistic firms end up behaving like

Correct Answer
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Firms are more likely to avoid a prisoner's dilemma when they interact repeatedly than when they rarely interact.

Correct Answer
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The Herfindahl-Hirschman Index is

Correct Answer
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A ________ occurs if all players in a game play their best strategies given what their competitors do.

Correct Answer
verified

Industries may be oligopolistic due to economies of scale.

Correct Answer
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Correct Answer
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A player chooses a maximin strategy to ________ gain the player can earn.

Correct Answer
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A form of oligopoly in which a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy is called

Correct Answer
verified

The economist Joseph Schumpeter argued that industrial concentration, in which a relatively small number of firms control the market place, actually the rate of .

Correct Answer
verified

Which choice below is an argument that more technological change occurs in more competitive market structures?

Correct Answer
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Exam 14: Oligopoly

In contestable markets, large oligopolistic firms end up behaving like

Correct AnswerverifiedShow Answer

Firms are more likely to avoid a prisoner's dilemma when they interact repeatedly than when they rarely interact.

Correct AnswerverifiedShow Answer

The Herfindahl-Hirschman Index is

Correct AnswerverifiedShow Answer

A ________ occurs if all players in a game play their best strategies given what their competitors do.

Correct AnswerverifiedShow Answer

Industries may be oligopolistic due to economies of scale.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A player chooses a maximin strategy to ________ gain the player can earn.

Correct AnswerverifiedShow Answer

A form of oligopoly in which a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy is called

Correct AnswerverifiedShow Answer

The economist Joseph Schumpeter argued that industrial concentration, in which a relatively small number of firms control the market place, actually ________ the rate of ________.

Correct AnswerverifiedShow Answer

Which choice below is an argument that more technological change occurs in more competitive market structures?

Correct AnswerverifiedShow Answer

Correct Answer
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The economist Joseph Schumpeter argued that industrial concentration, in which a relatively small number of firms control the market place, actually the rate of .

Correct Answer
verified

Correct Answer
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