QuizNote: It is recommended that you your response as you complete each question.________________________________________Question 1 (1 point) Some olgopolies are characterized by cartels in whichQuestion 1 options: members enter into collusive agreements. members try to recruit new members. members trust each other completely. members join together to act as a cometitive firm.Question 2 (1 point) Modeling a cartel as a prisoners’ dilemma game shows that __________ may be rational even if __________.Question 2 options: non-cooperation;cooperation benefits everyone cooperation;cooperation benefits everyone cooperation;cooperation damages everyone non-cooperation;cooperation damages everyoneQuestion 3 (1 point) A Nash equilibrium is an outcome in game theory in whichQuestion 3 options: price and output are the same as the competitive equilibrium. members of a cartel always cooperate with each other. the cartel produces the socially desirable outcome. each member of a cartel does the best that he/she can, given what the others are doing.Question 4 (1 point) Bob and Al are captured near the scene of a burglary and are given the “third degree” separately by the police. Each has to choose whether or not to confess and implicate the other. If neither man confesses, then both will serve one year on a charge of carrying a concealed weapon. If each confesses and implicates the other, both will go to prison for 10 years. However, if one burglar confesses and implicates the other, and the other burglar does not confess, the one who has collaborated with the police will go free, while the other burglar will go to prison for 20 years on the maximum charge. The strategies in this case are: confess or don’t confess. The payoffs are the sentences served. The most likely outcome for this game isQuestion 4 options: both Bob and Al confess and each serves 10 years. neither Bob and Al confess and each serves 1 year. Al confesses but Bob does not. Bob confesses but Al does not.Question 5 (1 point) All four market forms discussed in the lessons maximize profit whereQuestion 5 options: P = MC. AR = AC. MR = MC. MC = AR.Question 6 (1 point) Which of the following characteristics does not influence market structure?Question 6 options: the type of product the firm sells the firm’s ability to influence price whether the firm owns or rents its inputs the number of firms in the industryQuestion 7 (1 point) The analysis of oligopolistic behavior is difficult becauseQuestion 7 options: there are few real-world examples of oligopolies for economists to study. oligopolists make decisions independently of each other. firms in oligopolistic industries react to each others’ behavior in many ways. economists have paid little attention to the topic in recent years and so have not yet applied to it the techniques of modern economic theory.Question 8 (1 point) The game theory approach to the analysis of oligopoly assumes that oligopolistsQuestion 8 options: ignore their interdependence. behave with little forethought. do not take their businesses seriously. act strategically.Question 9 (1 point) An example of collusion isQuestion 9 options: a cartel. a pure monopoly. a monopolistic competitor. a perfectly contestable market.Question 10 (1 point) OligopolistsQuestion 10 options: are price takers. rarely advertise. must take rivals’ reactions into account. offer homogeneous products.
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