ECO 550 Final Exam 4
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ECO 550 Final Exam 4
1). In the absence of any legally binding enforcement mechanism, individual cartel producers may find it advantageous to cheat on the agreements and engage in secret price concessions.
2). When a promisor fails to put full effort into the performance of an agreement, yet the lack of effort is not independently verifiable, this lack of effort constitutes a
3). The Herfindahl-Hirschman index is a measure of ____.
4). In long-run equilibrium, all firms in a pure competition market situation operating under a condition of certainty will have identical costs even though they may use different production and operation techniques.
5). The distinctive characteristic of an oligopolistic market structure is that there are recognizable interdependencies among the decisions of the firms.
6). The Sherman Act prohibits:
7). Buying electricity off the freewheeling grid at one quarter 'til the hour for delivery on the hour illustrates:
8). Effective collusion generally is more difficult as the number of oligopolistic firms involved increases.
9). In pure competition:
10). An oligopoly is characterized by:
11). The kinked demand curve model was developed to help explain:
12). The profit-maximizing monopolist, faced with a negative-sloping demand curve, will always produce:
13). Capital expenditures:
14). Which of the following public policies has (have) the effect of restricting competition:
15). The cost of capital can be thought of as the rate of return required by investors in the firm's securities.
16). ____ occur whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant.
17). A firm in pure competition would shut down when:
18). The expected rate of return from a share of stock consists of:
19). In the purely competitive case, marginal revenue (MR) is equal to
20). In the short-run for a purely competitive market, a manufacturer will stop production when:
21). Patents have been defended by some on the grounds that they stimulate inventive activity. Others have argued for changes in current patent laws because:
22). A monopoly will always produce less than a purely competitive industry, ceteris paribus.
23). The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:
24). When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation.
25). The decision by the Municipal Transit Authority to either refurbish existing buses, buy new large buses, or to supplement the existing fleet with mini-buses is an example of:
26). Which of the following statements is (are) true concerning a pure competition situation?
27). Which of the following are not approaches to resolving the principal-agent problem:
28). If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical.
29). In the electric power industry, residential customers have relatively ____ demands for electricity compared with large industrial users and generally are charged ____ rates.
30). The largest problem faced in cartel pricing agreements such as OPEC is:
31). Non-redeployable durable assets that are dependent upon unique complementary and perfectly redeployable assets to achieve substantial value-added will typically be organized as
32). Governance mechanisms are designed
33). A(n) ____ is characterized by a relatively small number of firms producing a product.
34). The antitrust laws regulate all of the following business decisions except ____.
36). In the case of pure monopoly: