Which of the following industries would most likely represent monopolistic competition?
a. clothing
b. wheat
c. water utilities
d. soft drinks
QUESTION 2When the U.S. dollar depreciates in relation to the Swiss franc:
a. a U.S. importer will need more dollars to pay for an invoice denominated in Swiss francs.
b. a Swiss exporter will receive more Swiss francs for an invoice denominated in the exporter's currency.
c. Swiss imports of U.S. goods will fall.
d. the Swiss franc is now worth less in terms of the U.S. dollar.
e. a U.S. exporter will receive fewer dollars for an invoice denominated in Swiss francs.
QUESTION 3Which of the following statements about Nash equilibrium is true?
a. Every finite game has more than one Nash equilibrium.
b. A pair of dominant strategies in a price-fixing game is always a Nash equilibrium.
c. A dominance solvable game does not have a Nash equilibrium.
d. Games with an infinite number of strategies have multiple Nash equilibria.
QUESTION 4Which of the following is not common to perfect competition and monopolistic competition?
a. Free entry
b. Many sellers
c. Elimination of long run economic profits
d. Product differentiation
QUESTION 5When the U.S. dollar depreciates against other currencies:
a. foreign goods become less expensive to U.S. buyers.
b. U.S. goods become more expensive to foreign buyers.
c. foreign currencies depreciate against the U.S. dollar.
d. the volume of U.S. imports decline.
e. the volume of U.S. exports decline.
QUESTION 6In games without dominant strategies the Nash equilibrium can be found by using:
a. the cooperation vs. grim trigger strategy.
b. the chain-store paradox.
c. the principle of backward induction.
d. the method of iterated elimination of dominated strategies.
QUESTION 7Monopolistic competition is common in:
a. retail selling.
b. farming.
c. basic manufacturing.
d. electric power generation.
QUESTION 8When the exchange rate moves from 1 = CAD1.5 to 1 = CAD1.66, it implies:
a. the U.S. dollar has depreciated in relation to the Canadian dollar.
b. U.S. imports of Canadian goods will rise.
c. the dollar price of the Canadian dollar has risen.
d. the Canadian dollar has appreciated in relation to the U.S. dollar.
e. Canadian imports of U.S. goods will rise.
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