5 Written Questions

1. a market structure in which only a few sellers offer similar or identical products
2. a cost that has already been committed and cannot be recovered
3. total revenue divided by the quantity sold
4. a market structure in which many firms sell products that are similar but not identical
5. an agreement among firms in a market about quantities to produce or prices to charge

5 Multiple Choice Questions

1. a situation in which economic participants interacting with one another each choose their best strategy given the strategies that all the others have chosen
   1. game theory
   2. Nash equilibrium
   3. natural monopoly
   4. cartel
2. a strategy that is best for a player in a game regardless of the strategies chosen by the other players
   1. game theory
   2. cartel
   3. marginal revenue
   4. dominant strategy
3. the change in total revenue from an additional unit sold
   1. marginal revenue
   2. natural monopoly
   3. average revenue
   4. cartel
4. a firm that is the sole seller of a product without close substitutes
   1. sunk cost
   2. monopoly
   3. cartel
   4. oligopoly
5. the business practice of selling the same good at different prices to different customers
   1. monopolistic competition
   2. collusion
   3. dominant strategy
   4. price discrimination

5 True/False Questions

1. competitive market → the study of how people behave in strategic situations

   True        False

2. game theory → a firm that is the sole seller of a product without close substitutes

   True        False

3. prisoners' dilemma → a particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial

   True        False

4. cartel → a firm that is the sole seller of a product without close substitutes

   True        False

5. natural monopoly → a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

   True        False