Strategic behavior occurs when:
a. there are a large number of firms selling identical products.
b. there is only one firm in the market.
c. the firms have no command over the prices of the good they produce.
d. the firms can take any decision irrespective of what their rival does.
e. what is best for a firm depends on what his rival does.
QUESTION 2Private property rights imply that people can own things, and they can do what they want with what they own even if they infringe on the private property rights of others.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Oligopoly can arise from:
a. diseconomies of scale in production.
b. limited demand for a product in the market.
c. government regulations.
d. easy availability of the crucial inputs.
e. reduction of trade barriers.
QUESTION 4When an economy is operating on its production possibilities curve, more production of one good means less production of another because:
a. resources are limited.
b. resources are not perfectly adaptable to alternative uses.
c. wants are limited.
d. wants are unlimited.
e. some resources are not employed.
QUESTION 5An oligopoly market consists of:
a. many firms which produce a standardized product.
b. at least five firms one of which dominates the market.
c. firms that make independent pricing and output decisions.
d. a group of firms that dominate the market.
e. firms which face perfectly elastic demand curves.
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