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

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