Question 1

Section 1 of the Sherman Antitrust Act declares what to be illegal?

Accepted Answer

A) every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations 
B) mergers of a horizontal nature 
C) any attempt to monopolize an industry 
D) sharing of technology among competing firms or mergers where the effect is to lessen competition 
E) exiting an industry if the remaining firm or firms have a market share that is too large. 
A) every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations 
B) mergers of a horizontal nature 
C) any attempt to monopolize an industry 
D) sharing of technology among competing firms or mergers where the effect is to lessen competition 
E) exiting an industry if the remaining firm or firms have a market share that is too large. A

Question 2

One of the main tools economists use to analyze strategic behavior is

Accepted Answer

A) the Herfindahl-Hirschman Index. 
B) game theory. 
C) cartel theory. 
D) the collusion index. 
E) dual theory, which is used to study duopolies. 
A) the Herfindahl-Hirschman Index. 
B) game theory. 
C) cartel theory. 
D) the collusion index. 
E) dual theory, which is used to study duopolies. B

Question 3

In 1911, Standard Oil Co.was declared a monopoly by the government under the Sherman Act and the company was ordered to break itself up into competing companies.Two oil companies, Exxon and Mobil, were the result of this breakup.A few years ago, Exxon and Mobil merged again to form ExxonMobil Corporation.Why did the government allow this merger now?

Accepted Answer

When the government declared Standard Oil to be a monopoly and asked for its break up, the oil market was extremely concentrated.The government (and then the courts)concluded that Standard Oil had monopolized the oil trade.The merger of Exxon and Mobil was allowed because there are many more oil companies in the market now.The government concluded that the oil market was sufficiently competitive and that the merger was acceptable.

Question 4

What is the legal status of a cartel among firms in the United States?

Accepted Answer

Cartels are illegal

Question 5

A two-firm oligopoly is called a

Accepted Answer

A) double monopoly. 
B) cartel. 
C) duopoly. 
D) monopolistic oligopoly. 
E) dual-market. 
A) double monopoly. 
B) cartel. 
C) duopoly. 
D) monopolistic oligopoly. 
E) dual-market.

Question 6

Economists are skeptical that ________ occurs very often because firms engaging in it are certain to suffer an economic loss for a period of time.

Accepted Answer

A) a tying arrangement 
B) inefficient resale price maintenance 
C) predatory pricing 
D) efficient resale price maintenance 
E) exclusive dealing 
A) a tying arrangement 
B) inefficient resale price maintenance 
C) predatory pricing 
D) efficient resale price maintenance 
E) exclusive dealing

Question 7

One way to identify oligopoly is to

Accepted Answer

A) determine the market's minimum price. 
B) determine the market's maximum price. 
C) determine whether the firm's ATC exceeds price. 
D) use the Herfindahl-Hirschman Index (HHI). 
E) use the Efficiency test. 
A) determine the market's minimum price. 
B) determine the market's maximum price. 
C) determine whether the firm's ATC exceeds price. 
D) use the Herfindahl-Hirschman Index (HHI). 
E) use the Efficiency test.

Question 8

Because it was found guilty of violating the Sherman Act, Microsoft will be subject to

Accepted Answer

A) rate of return regulation. 
B) marginal cost pricing. 
C) price cap regulation. 
D) predatory pricing. 
E) None of the above answers is correct. 
A) rate of return regulation. 
B) marginal cost pricing. 
C) price cap regulation. 
D) predatory pricing. 
E) None of the above answers is correct.

Question 9

Which of the following is an example of exclusive dealing?

Accepted Answer

A) preventing a buyer from reselling a product outside a specific area 
B) forcing a buyer to buy other goods from a supplier 
C) forcing the purchase of all necessities from a single firm 
D) prohibiting a seller from selling a competing item 
E) selling different units of a good to the same buyer at different prices 
A) preventing a buyer from reselling a product outside a specific area 
B) forcing a buyer to buy other goods from a supplier 
C) forcing the purchase of all necessities from a single firm 
D) prohibiting a seller from selling a competing item 
E) selling different units of a good to the same buyer at different prices

Question 10

"Duopoly" is

Accepted Answer

A) another name for monopoly. 
B) a special type of monopolistic competition. 
C) a two-firm oligopoly. 
D) a game with three players. 
E) the situation when a firm sets a duo (two)of different prices for its customers. 
A) another name for monopoly. 
B) a special type of monopolistic competition. 
C) a two-firm oligopoly. 
D) a game with three players. 
E) the situation when a firm sets a duo (two)of different prices for its customers.

Question 11

-The figure above shows a the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly, what is the range of output and prices? Why does this range of outcomes exist?

Accepted Answer

If the firms operate as a monopoly, they

Question 12

Does section 2 of the Sherman Act make it a felony to "attempt" to monopolize an industry or must the attempt succeed before it is a felony?

Accepted Answer

Section 2 of the Sherman Act m

Question 13

Federal Trade Commission guidelines state that it will examine mergers in markets for which the Herfindahl-Hirschman Index is

Accepted Answer

A) a positive number. 
B) below 1,000 points. 
C) between 1,000 and 1,800 and the merger would reduce the index by 100 points. 
D) between 1,000 and 1,800, and the merger would increase the index by 100 points. 
E) more than 1,800. 
A) a positive number. 
B) below 1,000 points. 
C) between 1,000 and 1,800 and the merger would reduce the index by 100 points. 
D) between 1,000 and 1,800, and the merger would increase the index by 100 points. 
E) more than 1,800.

Question 14

If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,

Accepted Answer

A) they are forming a cartel. 
B) they would like the price of oil to be the same as if the market were perfectly competitive. 
C) game theory does not apply to their actions because they are nations, not firms. 
D) they will try to operate as a large, monopolistically competitive firm. 
E) they will agree to lower the price of oil in order to increase their profits. 
A) they are forming a cartel. 
B) they would like the price of oil to be the same as if the market were perfectly competitive. 
C) game theory does not apply to their actions because they are nations, not firms. 
D) they will try to operate as a large, monopolistically competitive firm. 
E) they will agree to lower the price of oil in order to increase their profits.

Question 15

What is the conclusion in the prisoners' dilemma?

Accepted Answer

A) Firms should not enter a legal duopoly. 
B) Two prisoners acting in their own best interest harm their joint interest. 
C) There is no Nash equilibrium available to the prisoners. 
D) Prisoners do not act interdependently. 
E) Duopolies almost always reach their best outcome. 
A) Firms should not enter a legal duopoly. 
B) Two prisoners acting in their own best interest harm their joint interest. 
C) There is no Nash equilibrium available to the prisoners. 
D) Prisoners do not act interdependently. 
E) Duopolies almost always reach their best outcome.

Question 16

Sally's Mom is pretty sure her twins, Tim and John, together cut the hair off Sally's Barbie doll.She talks to them separately and gives them the following options.If they both confess they will have to pay Sally $10 each.If Tim confesses and John does not confess, Tim pays $15 and John pays $8.If Tim does not confess and John confesses, Tim has to pay $8 and John $15.If both do not confess, they both pay her $14.Sally's Mom has them in separate rooms and they cannot talk to each other.
a∙Complete the payoff matrix below.
   
b∙If they reach the Nash equilibrium, what will Tim and John do?

Accepted Answer

@#IMG-DLM& 
a∙The complete payoff matrix

Question 17

Sammy's Inc.competes with a few other firms because there are natural barriers to entry.Sammy's operates in

Accepted Answer

A) a perfectly competitive market. 
B) an oligopoly. 
C) a monopolistically competitive market. 
D) a monopoly. 
E) a natural monopolistically competitive market. 
A) a perfectly competitive market. 
B) an oligopoly. 
C) a monopolistically competitive market. 
D) a monopoly. 
E) a natural monopolistically competitive market.

Question 18

When an oligopoly reduces its price with the intent of driving away its competitors, it is said to be engaging in

Accepted Answer

A) pricing differential. 
B) predatory pricing. 
C) price fixing. 
D) a price-tying agreement. 
E) price discrimination. 
A) pricing differential. 
B) predatory pricing. 
C) price fixing. 
D) a price-tying agreement. 
E) price discrimination.

Question 19

Which of the following is always illegal?

Accepted Answer

A) possessing a very large market share 
B) selling at a price below other producers because of efficiency 
C) price fixing 
D) attempting to merge with a competitor 
E) price discrimination 
A) possessing a very large market share 
B) selling at a price below other producers because of efficiency 
C) price fixing 
D) attempting to merge with a competitor 
E) price discrimination

Question 20

What is the dilemma faced by firms in oligopoly?

Accepted Answer

Because there are just a few large firms

Section 1 of the Sherman Antitrust Act declares what to be illegal?

One of the main tools economists use to analyze strategic behavior is

What is the legal status of a cartel among firms in the United States?

A two-firm oligopoly is called a

Economists are skeptical that ________ occurs very often because firms engaging in it are certain to suffer an economic loss for a period of time.

One way to identify oligopoly is to

Because it was found guilty of violating the Sherman Act, Microsoft will be subject to

Which of the following is an example of exclusive dealing?

"Duopoly" is

-The figure above shows a the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly, what is the range of output and prices? Why does this range of outcomes exist?

Does section 2 of the Sherman Act make it a felony to "attempt" to monopolize an industry or must the attempt succeed before it is a felony?

Federal Trade Commission guidelines state that it will examine mergers in markets for which the Herfindahl-Hirschman Index is

If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,

What is the conclusion in the prisoners' dilemma?

Sammy's Inc.competes with a few other firms because there are natural barriers to entry.Sammy's operates in

When an oligopoly reduces its price with the intent of driving away its competitors, it is said to be engaging in

Which of the following is always illegal?

What is the dilemma faced by firms in oligopoly?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters

Exam 18: Oligopoly

Section 1 of the Sherman Antitrust Act declares what to be illegal?

One of the main tools economists use to analyze strategic behavior is

What is the legal status of a cartel among firms in the United States?

A two-firm oligopoly is called a

Economists are skeptical that ________ occurs very often because firms engaging in it are certain to suffer an economic loss for a period of time.

One way to identify oligopoly is to

Because it was found guilty of violating the Sherman Act, Microsoft will be subject to

Which of the following is an example of exclusive dealing?

"Duopoly" is

-The figure above shows a the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly, what is the range of output and prices? Why does this range of outcomes exist?

Does section 2 of the Sherman Act make it a felony to "attempt" to monopolize an industry or must the attempt succeed before it is a felony?

Federal Trade Commission guidelines state that it will examine mergers in markets for which the Herfindahl-Hirschman Index is

If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,

What is the conclusion in the prisoners' dilemma?

Sammy's Inc.competes with a few other firms because there are natural barriers to entry.Sammy's operates in

When an oligopoly reduces its price with the intent of driving away its competitors, it is said to be engaging in

Which of the following is always illegal?

What is the dilemma faced by firms in oligopoly?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Markets for Factors of Production

Economic Inequality

Filters