Which of the following is a characteristic of the oligopoly model?
a. The oligopoly market consists of only a small number of sellers.
b. The sellers in an oligopoly market are price takers.
c. The output decisions taken by sellers are uniform and steady.
d. There are barriers to the exit of firms in an oligopoly market.
QUESTION 2A monopolist always produces on the elastic portion of the demand curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3A monopolistic competitor's demand curve tends to be more elastic than a monopolist's demand curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4In 1991, the French mineral water Perrier was temporarily taken off the market in the United States because of suspected impurities. Other things equal, this action brought about:
a. an increase in the demand for Perrier.
b. a decrease in the price of Perrier in terms of French francs.
c. a depreciation of the French franc relative to the U.S. dollar.
d. an appreciation of the French franc relative to the U.S. dollar.
e. an increase in the supply of dollars in the foreign exchange market.
QUESTION 5The Stackelberg model of oligopoly assumes that each of the two producers will choose prices instead of quantities and neither will change price in response to the other's decision.
Indicate whether the statement is true or false
QUESTION 6The marginal revenue curve of a monopolist coincides with its average revenue curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7A monopolistic competitor's demand curve tends to be more inelastic than a monopolist's demand curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 8The supply of Thai baht in the foreign exchange market originates with:
a. tourists who go on vacation to Thailand.
b. the export of Thai oranges and other goods.
c. Thai residents who wish to purchase goods from other countries.
d. the Thai royal family.
e. Thai central bank intervention to stop the peseta from depreciating.
QUESTION 9In an ascending value auction, a bidder attempts to win a certain object by bidding a price below his valuation but higher than anyone else's bid.
Indicate whether the statement is true or false
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