Site MapHelpFeedbackQuiz 1
Quiz 1
(See related pages)

1
Monopolistic competition and monopoly are similar in that both industry structures are characterized by:
A)strategic behavior
B)significant barriers to entry
C)downward sloping demand curves facing the individual firms in the industry
D)production at minimum long-run average cost
2
The mutual dependence of oligopolistic firms arises from product differentiation.
A)True
B)False
3
The "payoff matrix" in game theory illustrates:
A)the outcome of the winning strategy only
B)the ineffectiveness of collusion in oligopoly
C)the relationship between the Herfindahl index and the concentration ratio
D)outcomes associated with each possible combination of the firms' strategies
4
Goods produced by oligopolistic industries are typically:
A)standardized
B)differentiated
C)differentiated if industrial goods
D)differentiated if consumer goods
5
Compared to a competitive firm, a monopolistically competitive firm:
A)faces a more inelastic demand curve
B)is less likely to advertise its product
C)faces a more elastic demand curve
D)can earn positive profits in the long run
6
Oligopolistic industries may be:
A)less efficient than monopolies because the latter are typically regulated
B)more efficient than competitive industries because the latter are typically characterized by X-inefficiency
C)more efficient than monopolistically competitive industries because the latter typically spend too little on advertising
D)less efficient than monopolies because the latter equate price and marginal cost
7
Suppose that the typical firm in a particular monopolistically competitive industry is producing 100 units of output per day at an average total cost of $10. Its price is also $10. The firm's marginal revenue and its marginal cost are both $8. Further, it could reduce its average total cost to $7 by expanding output to 120 units per day. This information shows evidence of:
A)allocative inefficiency only
B)productive inefficiency only
C)both allocative and productive inefficiency
D)neither allocative nor productive inefficiency
8
An industry whose Herfindahl index is 5300, producing a standardized product, is most likely an example of:
A)pure competition
B)monopolistic competition
C)oligopoly
D)pure monopoly
9
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/1113273090/384259/quiz23a_9.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 D1 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
10
Use the following payoff matrix to answer the next question.
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/1113273090/384259/quiz23a_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 Gamma follows a high-price strategy and Delta follows a low-price strategy:
A)their profits will be the same
B)Gamma's profits will exceed Delta's profits
C)Delta would prefer to switch to a high-price strategy
D)Gamma would prefer to switch to a low-price strategy







McConnell MICRO AP 17eOnline Learning Center

Home > Chapter 11 > Quiz 1