Question 10.03 pts
Most markets in the United States:
Group of answer choices

are perfectly competitive.

are monopolies.

have some degree of competitiveness, but are not perfectly competitive.

have very few competitive features and so are regulated by the government.
 
Flag question: Question 2
Question 20.03 pts
When firms have market power, it means that they:
Group of answer choices

do not affect the market quantity offered for sale.

are a price taker.

can noticeably affect the market price.

None of these is true.
 
Flag question: Question 3
Question 30.03 pts
Price discrimination is:
Group of answer choices

choosing which prices to charge for certain items.

the process of customers choosing items based on price.

the practice of charging customers different prices for the same good.

the practice of charging customers the same price for a variety of similar goods.
 
Flag question: Question 4
Question 40.03 pts
Price discrimination exists:
Group of answer choices

because sellers try to exploit differences in customers’ willingness to pay.

in all industries, regardless of market structure.

only in perfectly competitive markets.

only when demand is inelastic.
 
Flag question: Question 5
Question 50.03 pts
A large difference between a monopolistically competitive firm and a monopoly is:
Group of answer choices

only the monopolist can set his price equal to demand.

only the monopolistically competitive firm is a price taker.

the ability for competition to enter the market in the short run.

the ability for competition to enter the market in the long run.
 
Flag question: Question 6
Question 60.03 pts
A price taker is a buyer or seller who:
Group of answer choices

has no control over setting the market price.

has complete control over setting the market price.

can influence the market price.

has the goal of maximizing market share, not profits.
 
Flag question: Question 7
Question 70.03 pts
An essential characteristic of a monopoly is:
Group of answer choices

many buyers must exist.

there can only be a few sellers in the market.

only one buyer must exist.

the good must have no close substitutes.
 
Flag question: Question 8
Question 80.03 pts
For a monopolist, marginal revenue for all units greater than 1:
Group of answer choices

is minimized at price.

is always equal to price.

is always less than price.

is never less than price.
 
Flag question: Question 9
Question 90.03 pts
In general, with a monopolist's outcome:
Group of answer choices

monopolies earn profit.

deadweight loss occurs.

consumers lose surplus.

All of these statements are true.
 
Flag question: Question 10
Question 100.03 pts
Natural monopolies are the natural result of:
Group of answer choices

geographical happenstance.

government regulations intended to encourage competition.

competition in markets in which economies of scale exist over the relevant range of output.

fierce tactics.
 
Flag question: Question 11
Question 110.03 pts
A cartel is:
Group of answer choices

a duopoly with more than two firms.

the "leader" of an industry, typically the firm with the largest market share.

a firm that always has a dominant strategy.

a number of firms who collude to make collective production decisions about quantities or prices.
 
Flag question: Question 12
Question 120.03 pts
A company with a strong brand identity:
Group of answer choices

can perpetuate false perceptions of quality or product differences.

conveys to customers an implicit guarantee of a product's quality.

promises consistency to customers.

All of these statements are true.
 
Flag question: Question 13
Question 130.03 pts
A defining characteristic of an oligopoly is:
Group of answer choices

all firms sell a standardized product.

easy entry and exit prevent long-run profits from being possible.

firms in the industry know they are competing with a few large firms with market power.

barriers to entry prevent newcomers to such an industry.
 
Flag question: Question 14
Question 140.03 pts
A dominant strategy is:
Group of answer choices

when one strategy is chosen and cannot be changed without making at least one of the players worse off.

when one strategy is always the best for a player to choose, regardless of what other players do.

when one strategy is chosen by a firm first and determines the best strategies of the other players that follow.

None of these statements is true.
 
Flag question: Question 15
Question 150.03 pts
A duopoly is:
Group of answer choices

two firms agreeing to act like a joint monopolist.

a strategy that benefits both firms.

an oligopoly with two firms.

an agreement, explicit or implied, between two firms.
 
Flag question: Question 16
Question 160.03 pts
A large difference between a monopolistically competitive firm and a monopoly is:
Group of answer choices

only the monopolist can set his price equal to demand.

only the monopolistically competitive firm is a price taker.

the ability for competition to enter the market in the short run.

the ability for competition to enter the market in the long run.
 
Flag question: Question 17
Question 170.03 pts
A price taker is a buyer or seller who:
Group of answer choices

has no control over setting the market price.

has complete control over setting the market price.

can influence the market price.

has the goal of maximizing market share, not profits.
 
Flag question: Question 18
Question 180.03 pts
Advertising:
Group of answer choices

can cause price competition and drive prices down.

and its effects are a hotly debated topic.

can cause perceived differences that don't exist and drive prices up.

All of these statements are true.
 
Flag question: Question 19
Question 190.03 pts
Cartels:
Group of answer choices

are usually illegal.

can create outcomes similar to a monopoly.

can effectively sustain large profits in the long run.

All of these statements are true.
 
Flag question: Question 20
Question 200.03 pts
Collusion is:
Group of answer choices

the act of firms working together to make decisions about price and quantity.

the act of firms undercutting one another in competition until zero profits are earned.

buyers acting in unison against a company in efforts to change its practices.

None of these statements is true.
 
Flag question: Question 21
Question 210.03 pts
If a monopolistically competitive firm is suffering losses in the short run:
Group of answer choices

the exit of competing firms will shift the firm's demand to the right.

the exit of competing firms will cause price to drop, but not affect the firm's demand curve.

the exit of competing firms will shift the firm's demand to the left.

the exit of competing firms will cause price to rise, but not affect the firm's demand curve.
 
Flag question: Question 22
Question 220.03 pts
Monopolistic competition describes a market with:
Group of answer choices

many firms that sell goods and services that are standardized.

few firms that sell goods and services that are similar, but slightly different.

few firms that sell goods and services that are standardized.

many firms that sell goods and services that are similar, but slightly different.
 
Flag question: Question 23
Question 230.03 pts
Monopolistically competitive firms can achieve product differentiation through:
Group of answer choices

creating a truly different product.

creating a product that cannot be easily substituted with a rival's product.

creating the perception of differences in their product.

All of these statements are true.
 
Flag question: Question 24
Question 240.03 pts
The good or service that firms in an oligopoly sell:
Group of answer choices

can be either standardized or have close substitutes.

has no close substitutes.

has close substitutes.

is standardized.
 
Flag question: Question 25
Question 250.03 pts
This prisoner's dilemma game shows the payoffs of two firms, A and B, in an oligopoly and their choices to either collude with one another or not. The left top rectangle shows the profits if both firms collude. The bottom left rectangle indicates Firm A keeps colluding while Firm B chooses to compete. The top left box shows the firm's profits if Firm B keeps colluding while Firm A chooses to compete. The bottom left box shows the profits if both compete. Given the situation in the matrix shown, we can predict that Firm A's profits will be:

prisoner's dillema1-1.jpg
Group of answer choices

$50 million.

$200 million.

$300 million.

$100 million.
 
Flag question: Question 26
Question 260.05 pts
This prisoner's dilemma game shows the payoffs of two firms, A and B, in an oligopoly and their choices to either collude with one another or not. The left top rectangle shows the profits if both firms collude. The bottom left rectangle indicates Firm A keeps colluding while Firm B chooses to compete. The top left box shows the firm's profits if Firm B keeps colluding while Firm A chooses to compete. The bottom left box shows the profits if both compete. Given the situation in the matrix shown, we can predict that Firm B's profits will be:



Given the situation in the matrix shown, we can predict that Firm A's profits will be:
Group of answer choices

$50 million.

$200 million.

$300 million.

$100 million.
 
Flag question: Question 27
Question 270.03 pts
What is normal profit?
Group of answer choices

Normal profit is equal to economic profit and occurs where price = average variable costs (AVC).

Normal profit is equal to zero economic profit and occurs where price = minimum average total costs (min AC).

Normal profit is equal to economic profit and occurs where price = min average variable costs (AVC).

Normal profit is equal to zero economic profit and occurs where price = min average variable costs (AVC).
 
Flag question: Question 28
Question 280.03 pts
When a Nash equilibrium is reached:
Group of answer choices

it must be true that all players have a dominant strategy.

no one has an incentive to break the equilibrium by changing his strategy.

the outcome will only change if the "lead" player changes his strategy.

None of these statements is true.
 
Flag question: Question 29
Question 290.03 pts
When a market consists of a few large firms, it:
Group of answer choices

is likely an oligopoly.

must be perfectly competitive.

must be monopolistically competitive.

is likely a monopoly.
 
Flag question: Question 30
Question 300.03 pts
When firms have market power, it means that they:
Group of answer choices

do not affect the market quantity offered for sale.

are a price taker.

can noticeably affect the market price.

None of these is true.