Principles of Microeconomics Chapter 10 Study Guide

question

_________ plays a critical role in markets characterized by monopolistic competition.

answer

product differentiation

question

In the long-run, each supplier in a monopolistically competitive industry will choose their quantity where ______ and profits are zero.

answer

price equals average total cost

question

For a monopolistically competitive firm some beneficial transactions do not occur, resulting in _________.

answer

deadweight loss

question

What is the term for when a group of firms cooperate to raise each other's profits?

answer

collusion

question

OPEC member nations form agreements to restrict output in order to increase their joint profits. Therefore, OPEC is a(n) ________.

answer

cartel

question

Given the payoff matrix below, which combination results in each firm using its dominant strategy

answer

Both firms producing high output

question

The payoff matrix, with payoffs measured in "utils", summaraizes the "Arms Race Game" played by the U.S. and the U.S.S.R. Which outcome is a Nash equilibrium?

answer

Both countries Build nuclear weapons

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question

_________ plays a critical role in markets characterized by monopolistic competition.

answer

product differentiation

question

In the long-run, each supplier in a monopolistically competitive industry will choose their quantity where ______ and profits are zero.

answer

price equals average total cost

question

For a monopolistically competitive firm some beneficial transactions do not occur, resulting in _________.

answer

deadweight loss

question

What is the term for when a group of firms cooperate to raise each other's profits?

answer

collusion

question

OPEC member nations form agreements to restrict output in order to increase their joint profits. Therefore, OPEC is a(n) ________.

answer

cartel

question

Given the payoff matrix below, which combination results in each firm using its dominant strategy

answer

Both firms producing high output

question

The payoff matrix, with payoffs measured in "utils", summaraizes the "Arms Race Game" played by the U.S. and the U.S.S.R. Which outcome is a Nash equilibrium?

answer

Both countries Build nuclear weapons

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