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econ final review
Terms in this set (30)
The first law designed to curb monopoly power in the US was what?
Sherman Antitrust Act
Which industry is most likely to be monopolistically competitive?
What occurs if coke hires lebron to make a commercial and pepsi follows by hiring aaron rodgers?
The large barriers to entry in the gas station buisness explain why the two only gas stations in a small town..?
Must produce a level of output such that MR=MC to maximize their profits
Product differentiation is most likely to occur when firms?
Have tacit agreements not to engage in price wars
In the classic prisoners' dilemma with two accomplices in crime, the dominant strategy for each individual is...?
Many customers will walk right past a diner that serves coffee and go to starbucks, where they pay more for coffee. For these customers coffee is differentiated by...?
One framework used to analyze strategic choices is..?
In contrast with perfect competition, a monopolist...?
may have economic profits in the long run
tacit collusion in an industry is limited by...?
a large number of firms and the bargaining power of buyers
Diamond rings are relatively scarce because...?
If you had an official license for the exclusive right to sell lemonade in your community, results from ...?
Which advertising slogan provides information to potential buyers?
Bee's Beachside Restaurant is the only restaurant on the beach for 50 miles.
Which statement concerning monopoly is true?
a monopoly has no rivals
Unwritten or unspoken understandings through which firms collude to restrict
competition are called..?
Monopolistic competition is similar to perfect competition because firms in both ....?
do not face barriers of entry in the long run
Monopolistic competitors often hire a celebrity spokesperson to advertise their products, perks is that...?
The fact that a firm is willing to pay the large fees associated with celebrity advertising signals consumers that it is a major company and that it is therefore likely to have reliable product.
The land you own has the only known source of aloe needed to make anti-itch lotion. In this case, your monopoly would result from which of the following?
ownership of scarce resources
An extreme case of oligopoly in which firms collude to raise joint profits is known as a...?
This occurs if ford offers rebates on its most popular truck and Chevrolet follows..?
A strategy in which players cooperate initially but then mimic what the other players do..?
NJ Transit chargers lower fares to senior citizens than to other passengers. Assuming the number increases the profits of NJ transit, we can conclude that senior citizens must have a ____ transportation than do other passengers.
When a monopolist practices price discrimination, compared with a single price monopolist, profits..?
Microsoft and its operating system are often cited as an example of a company that grew into a monopolist through..?
A negative externality..?
an uncompensated cost that an individual or firm imposes on others
Critics of advertising argue that advertising...?
creates demand for products that people otherwise do not want or need.
Among the drawbacks of brand names is the fact that they....?
may encourage the consumption of expensive substitutes for basic items
As product differntiation increases, the price elasticity of demand falls
Antibiotics may be _____ since people consider only the ______
overused; private and not the social costs of consumption
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