Question 1

Firms do not need to be concerned about striking a balance between the price effect and the output effect when making production decisions in which of the following types of markets?

Accepted Answer

A)   oligopoly
B)   duopoly
C)   monopoly
D)   competitive marketsE) B) and C)
F) A) and B)

Question 2

When an oligopoly market reaches a Nash equilibrium,

Accepted Answer

A)   the market price will be different for each firm.
B)   the firms will not have behaved as profit maximizers.
C)   a firm will have chosen its best strategy,given the strategies chosen by other firms in the market.
D)   a firm will not take into account the strategies of competing firms.E) A) and B)
F) B) and C)

Question 3

Scenario 17-5
Assume that a local bank sells two services,checking accounts and ATM card services.The bank's only two customers are Mr.Donethat and Ms.Beenthere.Mr.Donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his ATM card.Ms.Beenthere is willing to pay only $5 for a checking account,but is willing to pay $9 for unlimited use of her ATM card.Assume that the bank can provide each of these services at zero marginal cost.
-Refer to Scenario 17-5.If the bank is unable to use tying,what is the profit-maximizing price to charge for a checking account?

Accepted Answer

A)   $13
B)   $9
C)   $8
D)   $5E) A) and D)
F) All of the above

Question 4

In the prisoners' dilemma,

Accepted Answer

A)   the prisoners easily collude in order to achieve the best possible payoff for both.
B)   only one player has a dominant strategy.
C)   when each player chooses his dominant strategy the players achieve the best joint outcome.
D)   when each player chooses his dominant strategy the players reach a Nash equilibrium.E) A) and C)
F) A) and B)

Question 5

The prisoners' dilemma is an important game to study because

Accepted Answer

A)   most games present zero-sum alternatives.
B)   it identifies the fundamental difficulty in maintaining cooperative agreements.
C)   strategic decisions faced by prisoners are identical to those faced by firms engaged in competitive agreements.
D)   all interactions among firms are represented by this game.E) A) and B)
F) A) and D)

Exam 17: Oligopoly

The prisoners' dilemma is an important game to study because

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Firms do not need to be concerned about striking a balance between the price effect and the output effect when making production decisions in which of the following types of markets?

Correct Answer
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When an oligopoly market reaches a Nash equilibrium,

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Correct Answer
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In the prisoners' dilemma,

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Exam 17: Oligopoly

The prisoners' dilemma is an important game to study because

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Firms do not need to be concerned about striking a balance between the price effect and the output effect when making production decisions in which of the following types of markets?

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When an oligopoly market reaches a Nash equilibrium,

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In the prisoners' dilemma,

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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