Econ 001 - Principles of Microeconomics » Summer 2019 » Quiz 12

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Question #1
Which of the practices listed are illegal in the United States?
A.   oligopoly
B.   monopoly
C.   collusion
Question #2
What is the greatest incentive for creating a oligopoly?
A.   earn higher profits
B.   provide innovative products
C.   control the market
Question #3
In some cases oligopolies can benefit society by:
A.   taking advantage of scale economies to produce at low average cost.
B.   raising prices and reducing output.
C.   earning abnormal profits.
Question #4
In 2007, five or six major pharmaceutical companies formed a group in order to control the price of vitamins and adjust their production. Such an arrangement is called a ________.
A.   Cartel
B.   Duopoly
C.   Dominant strategy
D.   Monopoly
Question #5
Firms in an oligopoly often:
A.   make decisions based on the behavior or expected behavior of their competitors.
B.   have no incentive to collude.
C.   face perfectly elastic demand curves.
Question #6
How do oligopolies influence market inefficiencies?,,,,
A.   The industry makes higher profits.
B.   Prices for these goods are artificially high.
C.   Deadweight loss for society is increased.
D.   The industry produces less output.
Question #7
In a prisoner's dilemma, what type of behavior provides the most benefit for each individual?
A.   cooperate
B.   confess
C.   remain silent
Question #8
In the framework of an oligopoly, what strategy can work like a silent form of cooperation?
A.   always match other cartel firms' price cuts, but don’t match price increases
B.   always match other cartel firms' price increases, but don’t match price cuts
C.   immediately match price increases
D.   legally enforceable agreements
Question #9
________ arises when firms act together to reduce output and keep prices high.
A.   Oligopoly
B.   Cartel
C.   Monopoly
Question #10
Suppose circumstances have allowed several large firms to have all or most of the sales in an industry. Which of the following may be happening?,,
A.   cartel
B.   perfect competition
C.   oligopoly
Question #11
Saudi Arabia, Venezuela, Qatar and others, are members of OPEC, which is best described as which of the following?
A.   an oligopoly
B.   a cartel
C.   a monopoly
Question #12
For which of the following reason(s) are oligopolies inefficient?,,
A.   Typically they do not produce at the minimum of their average cost curves.
B.   ​Barriers to entry can allow them to earn sustained profits over long periods of time​.
C.   They may lack incentives to provide innovative products and high-quality service​.
Question #13
Oligopolistic markets:,,
A.   are usually thought of as the most efficient market structures.
B.   are characterized as having a small number of sellers.
C.   typically have higher barriers to entry.
Question #14
Which of the following are advantages that firms could gain by working together as if they were a monopoly?,,
A.   Firms can hold down industry output.
B.   Firms can increase industry productivity.
C.   Firms can charge a higher price.
Question #15
Firms in an oligopoly typically act more like ________.
A.   competitors
B.   business partners
C.   shareholders
Question #16
Which of the following refers to firms’ ability to make the same pricing decisions without consulting each other?
A.   malfeasance
B.   price fixing
C.   implicit collusion
Question #17
In the framework of an oligopoly, what strategy can work like a silent form of cooperation?
A.   legally enforceable agreements
B.   always match other cartel firms' price cuts, but don’t match price increases
C.   always match other cartel firms' price increases, but don’t match price cuts
D.   immediately match price increases

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