ECON 2306 Exam 3 - Assignment Essays

question

Which of the following describes monopolistic competition?

answer

Advertising plays a key role

question

In general, the demand for the product of a monopolistic competitor is

answer

relatively inelastic.

question

Why do firms in a monopolistically competitive industry advertise?

answer

Advertising is widespread because firms have differentiated products.-in the short firms advertising see direct results, all firms feel this way so advertising is the norm.

question

In a monopolistically competitive market there are

answer

many firms producing similar but not identical products

question

Compared with a monopolist, the demand curve faced by a monopolistically competitive firm is

answer

perfectly elastic

question

A monopolistic competitor finds its profit-maximizing rate of output by

answer

setting average revenue equal to average total cost.

question

Compared to a perfectly competitive firm, in a long run the monopolistically competitive firm will have

answer

a horizontal demand function.

question

A monopolistically competitive firm finds its profit-maximizing rate of output by equating

answer

the marginal revenue of advertising with the marginal cost of advertising.

question

A monopolistic competitor is like a monopolist in the short run in that when economic profits are

answer

greater than zero, changes in output are due to changes to plants by existing firms and there is no entry.

question

Which of the following statements about a monopolistically competitive firm is TRUE?

answer

A monopolistically competitive firm maximizes profits by charging a price equal to marginal cost.

question

An oligopoly is a market situation in which

answer

all the sellers act independently of the others.

question

All of the following are characteristics of an oligopoly EXCEPT

answer

small number of firms.

question

A horizontal merger involves

answer

the joining of two firms selling similar products.

question

Your teacher decides to play a game where every student must contribute a dollar. All money collected is distributed at the end of the game among the students. This is an example of a

answer

zero-sum game.

question

In game theory, the strategy that always yields the highest benefit for the player using it is the

answer

dominant strategy.

question

A game in which players as a group lose at the end of the game is referred to as

answer

negative-sum game.

question

If three firms of similar sizes join to form a cartel, then it is most likely that

answer

they will charge a common, higher market price.

question

If five firms of similar sizes join to form a cartel, then it is most likely that

answer

they will collectively produce less than before.

question

In an industry with network effects and differentiated products, it is possible for the industry to become an oligopoly if

answer

a few firms reap most of the sales gains resulting from positive market feedback.

question

When there is a tendency for a particular product to fall out favor with additional consumers because other consumers have chosen not to purchase the product

answer

negative market feedback occurs.

question

Firms in a monopolistically competitive market will advertise because

answer

they want to differentiate their products.

question

Monopolistically competitive firms advertise to attempt to

answer

build brand loyalty.

question

The demand curve for a monopolistically competitive firm is

answer

more elastic than for a monopoly firm.

question

In long-run equilibrium in a monopolistically competitive industry, a firm will

answer

produce at a point to the left of the minimum point on its average total cost curve.

question

If firms in a monopolistically competitive industry are operating with economic losses, over time we would see

answer

some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right.

question

Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry is

answer

50 percent

question

Which of the following is an example of a horizontal merger?

answer

Northeastern Illinois University merging with Roosevelt University.

question

There are fewer than half as many publishers of college textbooks in the United States now as a generation ago. Three companies alone account for almost two-thirds of the sale of new textbooks. This market situation characterized by very few sellers is known as

answer

an oligopoly.

question

Within a game theory model, if a change in decision-making raises corporation A's profits by $50 and lowers corporation B's profits by $40, the game is a

answer

positive-sum game.

question

Game theory would classify a cartel under the topic of

answer

cooperative games.

question

Within a game theory model, if a change in decision-making raises corporation A's profits by $50 and lowers corporation B's profits by $60, the game is a

answer

negative-sum game

question

If five firms of similar sizes join to form a cartel, then it is most likely that

answer

they will collectively produce less than before.

question

An association of producers such as OPEC that agrees to set common pricing or output goals is referred to as a

answer

cartel.

question

A cartel behaves like

answer

monopolist

question

When a consumer's willingness to buy a good or service is influenced by the number of people who have purchased that good or service, this is called

answer

a network effect.

question

When network effects are important, then an industry can experience

answer

positive market feedback.

question

The Lorenz curve shows what portion of total money income is accounted for by

answer

different proportions of a country's households.

question

"To each exactly the same" refers to

answer

egalitarian principle

question

All of the following aim to reduce income inequality EXCEPT

answer

regressive taxes.

question

Which of the following would cause the labor demand curve to shift to the right?

answer

an increase in labor productivity

question

A firm purchases more capital equipment. We would expect to observe

answer

an increase in the demand for labor by this firm

question

Which of the following would NOT be a reason for a shift in the labor demand curve?

answer

a change in the market wage rate

question

If an increase in the price of one input causes an increase in demand for labor, the two inputs are

answer

substitutes.

question

The wage rate found by the intersection of the market demand and supply curves for labor then determines the

answer

firm's supply curve for labor.

question

Right-to-work laws

answer

make it illegal to require union membership as a condition of continuing employment in a particular firm.

question

Which of the following is NOT considered to be a benefit of unionism?

answer

increased featherbedding

question

Since the National Basketball Association is the only significant employer of professional basketball players, it might be referred to as a(n)

answer

monopsony.

question

Under monopsony, marginal factor cost is

answer

greater than the wage rate

question

If the labor supply curve faced by a firm is rising, the marginal factor cost curve of labor must be

answer

rising and above the supply curve.

1 of 49

question

Which of the following describes monopolistic competition?

answer

Advertising plays a key role

question

In general, the demand for the product of a monopolistic competitor is

answer

relatively inelastic.

question

Why do firms in a monopolistically competitive industry advertise?

answer

Advertising is widespread because firms have differentiated products.-in the short firms advertising see direct results, all firms feel this way so advertising is the norm.

question

In a monopolistically competitive market there are

answer

many firms producing similar but not identical products

question

Compared with a monopolist, the demand curve faced by a monopolistically competitive firm is

answer

perfectly elastic

question

A monopolistic competitor finds its profit-maximizing rate of output by

answer

setting average revenue equal to average total cost.

question

Compared to a perfectly competitive firm, in a long run the monopolistically competitive firm will have

answer

a horizontal demand function.

question

A monopolistically competitive firm finds its profit-maximizing rate of output by equating

answer

the marginal revenue of advertising with the marginal cost of advertising.

question

A monopolistic competitor is like a monopolist in the short run in that when economic profits are

answer

greater than zero, changes in output are due to changes to plants by existing firms and there is no entry.

question

Which of the following statements about a monopolistically competitive firm is TRUE?

answer

A monopolistically competitive firm maximizes profits by charging a price equal to marginal cost.

question

An oligopoly is a market situation in which

answer

all the sellers act independently of the others.

question

All of the following are characteristics of an oligopoly EXCEPT

answer

small number of firms.

question

A horizontal merger involves

answer

the joining of two firms selling similar products.

question

Your teacher decides to play a game where every student must contribute a dollar. All money collected is distributed at the end of the game among the students. This is an example of a

answer

zero-sum game.

question

In game theory, the strategy that always yields the highest benefit for the player using it is the

answer

dominant strategy.

question

A game in which players as a group lose at the end of the game is referred to as

answer

negative-sum game.

question

If three firms of similar sizes join to form a cartel, then it is most likely that

answer

they will charge a common, higher market price.

question

If five firms of similar sizes join to form a cartel, then it is most likely that

answer

they will collectively produce less than before.

question

In an industry with network effects and differentiated products, it is possible for the industry to become an oligopoly if

answer

a few firms reap most of the sales gains resulting from positive market feedback.

question

When there is a tendency for a particular product to fall out favor with additional consumers because other consumers have chosen not to purchase the product

answer

negative market feedback occurs.

question

Firms in a monopolistically competitive market will advertise because

answer

they want to differentiate their products.

question

Monopolistically competitive firms advertise to attempt to

answer

build brand loyalty.

question

The demand curve for a monopolistically competitive firm is

answer

more elastic than for a monopoly firm.

question

In long-run equilibrium in a monopolistically competitive industry, a firm will

answer

produce at a point to the left of the minimum point on its average total cost curve.

question

If firms in a monopolistically competitive industry are operating with economic losses, over time we would see

answer

some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right.

question

Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry is

answer

50 percent

question

Which of the following is an example of a horizontal merger?

answer

Northeastern Illinois University merging with Roosevelt University.

question

answer

an oligopoly.

question

Within a game theory model, if a change in decision-making raises corporation A's profits by $50 and lowers corporation B's profits by $40, the game is a

answer

positive-sum game.

question

Game theory would classify a cartel under the topic of

answer

cooperative games.

question

Within a game theory model, if a change in decision-making raises corporation A's profits by $50 and lowers corporation B's profits by $60, the game is a

answer

negative-sum game

question

If five firms of similar sizes join to form a cartel, then it is most likely that

answer

they will collectively produce less than before.

question

An association of producers such as OPEC that agrees to set common pricing or output goals is referred to as a

answer

cartel.

question

A cartel behaves like

answer

monopolist

question

When a consumer's willingness to buy a good or service is influenced by the number of people who have purchased that good or service, this is called

answer

a network effect.

question

When network effects are important, then an industry can experience

answer

positive market feedback.

question

The Lorenz curve shows what portion of total money income is accounted for by

answer

different proportions of a country's households.

question

"To each exactly the same" refers to

answer

egalitarian principle

question

All of the following aim to reduce income inequality EXCEPT

answer

regressive taxes.

question

Which of the following would cause the labor demand curve to shift to the right?

answer

an increase in labor productivity

question

A firm purchases more capital equipment. We would expect to observe

answer

an increase in the demand for labor by this firm

question

Which of the following would NOT be a reason for a shift in the labor demand curve?

answer

a change in the market wage rate

question

If an increase in the price of one input causes an increase in demand for labor, the two inputs are

answer

substitutes.

question

The wage rate found by the intersection of the market demand and supply curves for labor then determines the

answer

firm's supply curve for labor.

question

Right-to-work laws

answer

make it illegal to require union membership as a condition of continuing employment in a particular firm.

question

Which of the following is NOT considered to be a benefit of unionism?

answer

increased featherbedding

question

Since the National Basketball Association is the only significant employer of professional basketball players, it might be referred to as a(n)

answer

monopsony.

question

Under monopsony, marginal factor cost is

answer

greater than the wage rate

question

If the labor supply curve faced by a firm is rising, the marginal factor cost curve of labor must be

answer

rising and above the supply curve.

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