question
An action, say A, is strictly dominated by an action, say B, for an agent if (q1)
answer
B produces a lower payoff than A independently of what the other players do
question
A Nash Equilibrium is a profile of actions in which each agent is playing __________ to the other player's action. (q3)
answer
a best response
question
The profile of actions in which each agent plays _________ is always a Nash Equilibrium (q7)
answer
a strictly dominant action
question
A strictly dominant action produces: (q11)
answer
a higher payoff than any other action the player can use for every possible action of the other players
question
When we identify a strictly dominated actoin, it is reasonable to predict (q12)
answer
the strictly action will not be selected
question
A monopoly sets a price of $50 per unit for an item that has a marginal cost of $10. Assuming profit maximization by the monopoly and utility maximization by the agents, the price elasticity of demand measured at the quantity consumed by the a gens is equal to: (q16)
answer
-1.25
question
Since a monopoly charges a price that is greater than the competitive price, then the government can reduce the deadweight loss in the society by imposing a sales tax. (q17)
answer
False
question
A monopoly faces a demand function Q(p)=200-4p. Suppose that it has a constant marginal cost of 14 and no fixed costs. What is this monopoly's profit? (q18)
answer
1296
question
A profit maximizing monopolist faces a demand function given by Q(p)=70-p. The cost function is C(q)=5q. Suppose that the government introduces a tax of $8 per unit of output. As a result of the tax, the monopolist will? (q19)
answer
increase price by $4
question
The ability of a monopoly to charge price that exceeds marginal cost depends on : (q20)
answer
price elasticity of deman
question
If the inverse demand function for a monopoly's product is p=a-bQ, then the firm's marginal revenue function is: (q21)
answer
a-2bQ
question
For a monopoly, marginal revenue is less than price because: (q25)
answer
the firm must lower price if it wishes to sell more output
question
Suppose that a monopolist faces the market demand Q(p)=1000-2p. Then its marginal revenue function MR(q) is? (q26)
answer
MR(q)=500-q
question
A monopoly incurs a marginal cost of $1 for each unit produced. If the price elasticity of demand equals -2, the monopoly maximizes profits by charging a price of: (q27)
answer
$2
question
A monopoly faces a demand function Q(p)=50-p/2. Suppose that it has a constant marginal cost of 16 and no fixed costs. What is this monopoly's profit maximizing price? (q29)
answer
58
question
A monopolist faces a demand curve described by P(Q)=100-2Q and has a constant marginal cost of 16 and 0 fixed cost. If this monopolist is able to practice perfect price discrimination, its total profits will be? (q33)
answer
1764
question
In an imperfect competition market, (q38)
answer
firms internalize the consequences of their pricing/production decisions
question
A monopoly: (q37)
answer
is a firm that controls 100% of the production of a certain good.
question
A monopolist maximizes profits by: (q22)
answer
by setting a marginal profit equal to marginal cost
question
A monopolist: (q39)
answer
sells at a price higher than the competitive price
question
A monopolist: (q40)
answer
produces less than the competitive outcome
question
A monopolist? (q30)
answer
Produces a quantity that is generally less than the competitive outcome
question
A monopolist? (q24)
answer
Produces a quantity that maximizes its profits
question
A monopolist's marginal revenue is 0 whenever the price elasticity of demand is -1. (q23)
answer
True
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