Site MapHelpFeedbackQuiz 3
Quiz 3
(See related pages)

1
Monopolistic competition and oligopoly share which characteristic?
A)Free entry and exit from the industry
B)strategic behavior
C)standardized products
D)advertising
2
Cartels are more difficult to sustain:
A)the smaller the number of firms in the cartel
B)the more similar their cost structures
C)the more difficult for new firms to enter into the industry
D)during a recession
3
Compared to a purely competitive firm with the same cost structure, a monopolistically competitive firm will typically:
A)achieve only allocative efficiency
B)achieve only productive efficiency
C)produce less and charge a higher price
D)produce more and charge a lower price
4
Firms in purely competitive markets differ from those in monopolistically competitive markets in that only the latter:
A)achieve allocative efficiency
B)produce with excess capacity in long-run equilibrium
C)equate marginal revenue and marginal cost to maximize profits
D)can freely enter the industry
5
Use the following payoff matrix to answer the next question.
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273090/384259/quiz23c_5.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>
Refer to the matrix, which shows the profit payoffs to each of two oligopolistic firms of following either a high or low price policy. Gamma's payoffs are in the lower left corner of each cell; Delta's in the upper right. If both firms collude to maximize joint profits, the combined profits of the two firms will be:
A)$40
B)$60
C)$95
D)$100
6
Use the following diagram of a noncollusive oligopolist to answer the next question:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273090/384259/quiz23c_6.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>
Refer to the diagram. The demand curve labeled D2 is drawn on the assumption that this firm's rivals:
A)follow both price increases and decreases
B)follow neither price increases nor decreases
C)follow only price increases
D)follow only price decreases
7
Use the following diagram of a monopolistically competitive firm to answer the next question.
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273090/384259/quiz23c_7.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>
Refer to the diagram. Suppose the demand for this industry's product increases, shifting each firm's demand curve to the right. In the long run, we would expect:
A)entry of new firms, shifting up the average total cost curve of each original firm to restore equilibrium
B)entry of new firms, shifting back the demand curve for each original firm to restore equilibrium
C)exit of some firms, shifting back the demand curve for each original firm to restore equilibrium
D)exit of some firms, shifting up the average total cost curve of each original firm to restore equilibrium
8
In an oligopolistic industry:
A)firms behave strategically
B)output is produced at minimum average total cost
C)firms make price and output decisions without regard to the responses of their rivals
D)high profits will attract many new entrants to the industry
9
A particular industry consists of three firms whose market shares are 50%, 30%, and 20%. The Herfindahl index for the industry is:
A)33.3
B)100
C)2400
D)3800
10
Use the following payoff matrix to answer the next question.
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273090/384259/quiz23c_10.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>
Refer to the matrix, which shows the profit payoffs to each of two oligopolistic firms of following either a high or low price policy. Gamma's payoffs are in the lower left corner of each cell; Delta's in the upper right. If both firms make their decisions independently, the most likely outcome is:
A)$50 for both Gamma and Delta
B)$30 for both Gamma and Delta
C)$75 for Gamma and $20 for Delta
D)$20 for Gamma and $75 for Delta







McConnell, Microeconomics 17eOnline Learning Center

Home > Chapter 11 > Quiz 3