Question 1

A manufacturer of light bulbs sells its products to retail stores and requires the stores to sell the bulbs to customers for $2 per bulb. This practice is known as tying.

Accepted Answer

A) True 
 B)False

Question 2

Game theory is important for the understanding of

Accepted Answer

A)   competitive markets.
B)   monopolies.
C)   oligopolies.
D)   all market structures.E) None of the above
F) All of the above

Question 3

Figure 17-5. Two companies, ABC and QRS, are sellers in the same market. Each company decides whether to charge a high price or a low price. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies. 
-Refer to Figure 17-5. If this game is played only once, then the most likely outcome is that

Accepted Answer

A)   both firms charge a low price.
B)   ABC charges a low price and QRS charges a high price.
C)   ABC charges a high price and QRS charges a low price.
D)   both firms charge a high price.E) A) and B)
F) A) and C)

Question 4

Reaching and enforcing an agreement between members of a cartel becomes more difficult as the size of the group __________.

Accepted Answer

The answer of Reaching and enforcing an agreement between members...

Question 5

If firms in an oligopoly agree to produce according to the monopoly outcome, they will produce the same level of output as they would produce in a Nash equilibrium.

Accepted Answer

A) True 
 B)False

Question 6

Table 17-21
The Chicken Game is named for a contest in which drivers test their courage by driving straight at each other. John and Paul have a common interest to avoid crashing into each other, but they also have a personal, competing interest to not turn first to demonstrate their courage to those observing the contest. The payoff table for this situation is provided below. The payoffs are shown as (John, Paul) . 
-Refer to Table 17-21. If John chooses Turn, what will Paul choose to do and what will Paul's payoff equal?

Accepted Answer

A)   Turn, 10
B)   Drive Straight, 20
C)   Turn, 5
D)   Drive Straight, 0E) A) and B)
F) A) and D)

Question 7

Table 17-14
This table shows a game played between two players, A and B. The payoffs in the table are shown as (Payoff to A, Payoff to B) . 
-Refer to Table 17-14. Which outcome is the Nash equilibrium in this game?

Accepted Answer

A)   Up-Right
B)   Up-Left
C)   Down-Right
D)   Down-LeftE) A) and B)
F) All of the above

Question 8

For cartels, as the number of firms (members of the cartel)  increases,

Accepted Answer

A)   the monopoly outcome becomes more likely.
B)   the magnitude of the price effect decreases.
C)   the more concerned each seller is about its own impact on the market price.
D)   the easier it becomes to observe members violating their agreements.E) C) and D)
F) None of the above

Exam 17: Oligopoly

A manufacturer of light bulbs sells its products to retail stores and requires the stores to sell the bulbs to customers for $2 per bulb. This practice is known as tying.

Correct Answer
verified

If firms in an oligopoly agree to produce according to the monopoly outcome, they will produce the same level of output as they would produce in a Nash equilibrium.

Correct Answer
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Game theory is important for the understanding of

Correct Answer
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For cartels, as the number of firms (members of the cartel) increases,

Correct Answer
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Correct Answer
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Table 17-14 This table shows a game played between two players, A and B. The payoffs in the table are shown as (Payoff to A, Payoff to B) . -Refer to Table 17-14. Which outcome is the Nash equilibrium in this game?

Correct Answer
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Reaching and enforcing an agreement between members of a cartel becomes more difficult as the size of the group __________.

Correct Answer
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Correct Answer
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Exam 17: Oligopoly

A manufacturer of light bulbs sells its products to retail stores and requires the stores to sell the bulbs to customers for $2 per bulb. This practice is known as tying.

Correct AnswerverifiedShow Answer

If firms in an oligopoly agree to produce according to the monopoly outcome, they will produce the same level of output as they would produce in a Nash equilibrium.

Correct AnswerverifiedShow Answer

Game theory is important for the understanding of

Correct AnswerverifiedShow Answer

For cartels, as the number of firms (members of the cartel) increases,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 17-14 This table shows a game played between two players, A and B. The payoffs in the table are shown as (Payoff to A, Payoff to B) . -Refer to Table 17-14. Which outcome is the Nash equilibrium in this game?

Correct AnswerverifiedShow Answer

Reaching and enforcing an agreement between members of a cartel becomes more difficult as the size of the group __________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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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Correct Answer
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Correct Answer
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Correct Answer
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