econ 206 practice quiz ch. 17
ECON 206 Practice Quiz (chapter 17)
____
1. In general, game theory is the study of
a. how people behave in strategic situations.
b. how people behave when the possible actions of other people are irrelevant.
c. oligopolistic markets.
d. all types of markets, including competitive markets, monopolistic markets, and oligopolistic markets.
Table 17-2. The table shows the town of Pittsville’s demand schedule for gasoline. For simplicity, assume the town’s gasoline seller(s) incur the same costs.
Quantity
(in gallons)
0
100
200
300
400
500
600
700
800
900
1,000
____
____
____
____
Price
$10
9
8
7
6
5
4
3
2
1
0
Total Revenue
(and total profit)
$0
900
1,600
2,100
2,400
2,500
2,400
2,100
1,600
900
0
2. Refer to Table 17-2. If the market for gasoline in Pittsville is a monopoly, then the profit-maximizing monopolist will charge a price of
a. $8 and sell 200 gallons.
b. $5 and sell 500 gallons.
c. $2 and sell 800 gallons.
d. $0 and sell 1,000 gallons.
3. Refer to Table 17-2. If there are exactly two sellers of gasoline in Pittsville and if they collude, then which of the following outcomes is most likely?
a. Each seller will sell 500 gallons and charge a price of $5.
b. Each seller will sell 500 gallons and charge a price of $2.50.
c. Each seller will sell 350 gallons and charge a price of $3.
d. Each seller will sell 250 gallons and charge a price of $5.
4. The equilibrium price in a market characterized by oligopoly is
a. higher than in monopoly markets and higher than in perfectly competitive markets.
b. higher than in monopoly markets and lower than in perfectly competitive markets.
c. lower than in monopoly markets and higher than in perfectly competitive markets.
d. lower than in monopoly markets and lower than in perfectly competitive markets.
5. When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firms in the
____
1. In general, game theory is the study of
a. how people behave in strategic situations.
b. how people behave when the possible actions of other people are irrelevant.
c. oligopolistic markets.
d. all types of markets, including competitive markets, monopolistic markets, and oligopolistic markets.
Table 17-2. The table shows the town of Pittsville’s demand schedule for gasoline. For simplicity, assume the town’s gasoline seller(s) incur the same costs.
Quantity
(in gallons)
0
100
200
300
400
500
600
700
800
900
1,000
____
____
____
____
Price
$10
9
8
7
6
5
4
3
2
1
0
Total Revenue
(and total profit)
$0
900
1,600
2,100
2,400
2,500
2,400
2,100
1,600
900
0
2. Refer to Table 17-2. If the market for gasoline in Pittsville is a monopoly, then the profit-maximizing monopolist will charge a price of
a. $8 and sell 200 gallons.
b. $5 and sell 500 gallons.
c. $2 and sell 800 gallons.
d. $0 and sell 1,000 gallons.
3. Refer to Table 17-2. If there are exactly two sellers of gasoline in Pittsville and if they collude, then which of the following outcomes is most likely?
a. Each seller will sell 500 gallons and charge a price of $5.
b. Each seller will sell 500 gallons and charge a price of $2.50.
c. Each seller will sell 350 gallons and charge a price of $3.
d. Each seller will sell 250 gallons and charge a price of $5.
4. The equilibrium price in a market characterized by oligopoly is
a. higher than in monopoly markets and higher than in perfectly competitive markets.
b. higher than in monopoly markets and lower than in perfectly competitive markets.
c. lower than in monopoly markets and higher than in perfectly competitive markets.
d. lower than in monopoly markets and lower than in perfectly competitive markets.
5. When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firms in the