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200810021151170 - Microeconomics Testbank 1(Hubbard/O'Brien...

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Microeconomics – Testbank 1, (Hubbard/O’Brien) Chapter 13: Oligopoly: Firms in Less Competitive Markets MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Members of OPEC can increase their income by selling more oil than its output quota because: A) the demand for oil is perfectly elastic. B) by selling more at OPEC's cartel price, a member will automatically earn more income. C) each member's demand is more elastic than the total demand for oil. D) the demand for oil is inelastic, total revenue increases. Answer: C Diff: 3 Page Ref: 428 2) The prisoners' dilemma results in a noncooperative equilibrium because: Diff: 2 Page Ref: 422 3) Oligopolies are difficult to analyze because: A) demand and cost curves do not exist for these types of industries. B) how oligopoly firms respond to a price change by a rival is uncertain. C) the firms are so large. D) oligopolies are a recent development so economists have not had time to develop models. Answer: B Diff: 2 Page Ref: 416 4) As word processing on personal computers expanded, sales of typewriters began to disappear due to: Diff: 1 Page Ref: 430 5) Some firms are able to earn profits by competing with a dominant firm like Walmart by: Diff: 2 Page Ref: 434 6) A decision tree is good at analyzing: A) prisoners' dilemma games. B) repeatable games. C) sequential games. D) cooperative equilibrium games. Answer: C Diff: 2 Page Ref: 428
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7) A dominant strategy in a game theory analysis of oligopoly behavior is: Diff: 2 Page Ref: 421
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200810021151170 - Microeconomics Testbank 1(Hubbard/O'Brien...

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