Hey all, I have been working hard on these questions for days and I cant seem to find the answers and I have come to you guys for some help. I have honestly tried and now I'm stumped and if I don't pass this I cant move on to the next course, will you take a look at the questions below and see if you can help please?
Thanks in advance
An oligopolistic market is consistent with:
a. All firms making economic profits
b. A small number of firms in the industry
c. The existence of barriers to entry
d. All of the above
The benefit of the mixed strategy is:
a. the element of consistency that baffles the rivals.
b. lower returns for both players in the markets.
c. higher returns for both players in the market.
d. the element of surprise that baffles the rivals
In a Nash equilibrium, firms are clearly strategically interdependent and:
a. they determine price in a closed auction bid system.
b. they are dependent on differentiated goods.
c. they are non-cooperative in determining market outcomes.
d. they cooperate with each other to determine market outcomes.
Economists tend to focus on one structural aspect of market organization that is more important than the others. It is:
a. product homogeneity or differentiation.
b. the quality of market information.
c. the number of buyers and sellers.
d. entry and exit conditions.
Elmer’s Glue has captured the market for school glue. It is preferred by both students and parents alike. It takes very little capitalization to enter the market but nobody successfully does. The glue clearly needs no patents or secret formulas. This type of market is called:
c. pure or perfect competition.
d. monopolistic competition.
A dominant strategy is one where the one firm picks:
a. a strategy no matter what the rival does.
b. a strategy that must be repeated.
c. a strategy only after seeing the other firm’s decision.
d. the same the strategy as the rival
A market where a few firms produce most of the output or sales is called:
c. perfectly competitive.
d. monopolistically competitive.
A monopoly is most likely to emerge and be sustained when:
a. Firms have U-shaped, average-total-cost curves
b. Output demand is relatively elastic
c. Fixed capital costs are small relative to total costs
d. Economies of scale are large relative to market demand
For the perfectly or purely competitive firm, profit maximization occurs at an output level where:
a. P = AVC
b. MC = ATC.
c. P < AVC.
d. P = MC
The market for micro-computers (PCs) is fairly competitive, the products are somewhat homogeneous, and, over time, firms have entered looking to make profits on new configurations of the micro-computer. Over time, profits:
a. are not important since this industry is in the nonprofit sector.
b. have stayed about the same for most firms.
c. have become razor thin for many producers.
d. have risen dramatically.
Which is a characteristic of monopolistic competition?
a. Standardized product
b. Absence of nonprice competition
c. Relatively easy entry
d. A relatively small number of firms
If a firm is earning a large economic profit and the firm operates in a fairly competitive market, then, over time:
a. new firms will enter and prices will fall.
b. old firms will exit and prices will rise.
c. new firms will enter and prices will rise.
d. old firms will exit and prices will fall.
Under monopoly, there are:
a. the advantages of heterogeneous products.
b. many competitors.
c. unexploited gains from trade (or, inefficiencies).
d. problems of easy entry.
A necessary condition for market power to exist for a particular company in a market is that:
a. the number of firms is over 150.
b. information must be understood by both buyers and sellers.
c. effective barriers to entry must exist.
d. consumers perceive all products as homogeneous.
In a monopolistically competitive market, the advantage that a seller has over competitors or newcomers is:
a. the license or patent.
b. consumer preference for its brand.
c. economies of scale.
d. low costs from the learning curve effect.
For any company operating in a marketplace, the firm attempts to maximize the value of company’s worth by setting output where:
a. MR = MC.
b. AR = MC.
c. P < AVC.
d. costs are lowest.
Sometimes an old company in an industry can build a larger plant that has lower costs per unit than a potential entrant (newcomer) can duplicate. That is market:
a. weakness based on reputation deficiency.
b. power based on specific assets.
c. power based on scale economies.
d. weakness based on cost.
The Prisoner’s Dilemma and the problem of the cartel are very similar. In both cases:
a. non-cooperation is an instable solution.
b. non-cooperation would improve the outcome, but it rarely happens.
c. cooperation is the only solution.
d. cooperation would improve the outcome, but it rarely happens.
Though Nash games are noncooperative, a cooperative outcome is more likely if
a. long run gains are greater than short run gains.
b. firms can easily monitor the outcomes from cooperation.
c. firms expect the market relationship to last a long time.
d. All of the above.
Which is most characteristic of a pure monopoly?
a. Exit from the industry is blocked but entry into the industry is relatively easy
b. There is a dominant firm in a multifirm industry
c. The firm has considerable control over the quantity of the output produced, but not over price
d. The firm produces a good or a service for which there are no close substitutes