D. A threat that is the best option for the punisher when punishment conditions appear

E. A publicly announced threat

10. Which of the following industries may operate at zero economic profits?

A. A regulated monopoly

B. A monopolistic competition

C. An oligopoly

D. All of the above

E. None of the above

11. A dominant strategy is the one that:

A. Implies manipulation over the other player's actions, direct or indirect

B. Brings the highest possible payoff for every action chosen by other players

C. Brings a first-mover advantage

D. Constitutes a best response on the equilibrium strategy of the other player

E. Brings a payoff higher than that of the other player

12. As an oligopolistic industry moves into a cartel:

A. Social efficiency decreases

B. Overall output increases

C. Profits increase

D. More than one of the above

E. None of the above

13. Monopoly is inefficient because :

A. The monopolist produces where the price is greater than the marginal cost

B. The consumer pays more for an extra unit of production than it costs society

C. There is a dead weight loss

D. All of the above

E. Monopoly is efficient because it can price-discriminate.

14. The requirements for price discrimination are:

A. Seller must be a monopolist or have considerable monopoly power

B. Sellers must be capable of dividing consumers into different classes, each class having a different demand curve

C. Marginal costs of production for the different classes must be similar

D. Consumers charged a lower price must be incapable of reselling to consumers in the higher priced class

E. All of the above

15. Which of these situations is not an example of price discrimination?

A. John works nights so he has to buy bread at 7 a.m. rather than at 7 p.m.

B. Bob receives a “$1 off” coupon as a frequent buyer of this shop

C. Katie buys a pack of 4 Cokes for $3 and Josh buys one Coke at a time for $1

D. Velma likes to go to the movies at the lower afternoon matinee price and Rosemary would rather pay more for the evening show

E. Jason and Tierney go to a popular nightclub. Because it is “Ladies Night” Tierney pays no cover charge, but Jason must pay to enter the club

16. There is no dead weight loss in

I. Perfect competition

II. Natural monopoly

III. Perfectly discriminating monopoly

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II and III

17. What is (or are) the right regulation of natural monopoly and it’s effect on the market (use the line number for your answer)?

A. I only

B. I and II only

C. I and III only

D. I, II and III only

E. IV only

18. Which of the following is a necessary condition for a monopoly to exist?

A. Economies of scale over all relevant levels of output

B. Any potential entrant to the industry would be unprofitable

C. Monopoly is the most efficient structure for this industry

D. More than one of the above

Date: 2015-12-17; view: 636