Highly Competitive Setting in Which Oligopoly Firms
Operate Questions and Answers
Unit 4 Test
Question 1
In the highly competitive setting in which oligopoly firms operate, which of the following are considered
to be typical temptations each may face?
to cooperate to act as a single monopoly and all of the above
Question 2
The main categories of market-oriented approaches to pollution control are
marketable permits; better-defined property rights; pollution charges.
Question 3
When exit occurs in a monopolistically competitive industry the
perceived demand and marginal revenue curves will shift to the right.
Question 4
In competitive settings, profits will lead firms to _________________ and losses will lead firms
___________, so the incentives for producing at low cost and coming up with new ways of pleasing
customers are strong.
enter the market; to exit
Question 5
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away
from the other, the total result is
they will simply neutralize one another's efforts.
, Question 6
If an externality of pollution exists for all manufacturers in a given industry, then all related
are no longer represented in their supply curves.
Question 7
The term ______________ refers to a situation where the firms supposedly being regulated end up
playing a large role in setting the regulations that they will follow.
regulatory capture
Question 8
Through the process of exit, monopolistically competitive firms remaining in the market
are no longer earning losses.
Question 9
Certain schools of economic thought suggest that a _____________ would reduce pollution in a
__________________, when compared to command-and-control regulation.
pollution tax; flexible, more cost-effective way
Question 10
Which of the following may be legal and even common practice in a market economy?
bundling several products together and selling them as a package
Question 11
Property rights are the legal rights of ownership on which others are
not allowed to infringe without paying compensation.
Question 12
Antitrust law includes specific rules against restrictive practices in particular because
Operate Questions and Answers
Unit 4 Test
Question 1
In the highly competitive setting in which oligopoly firms operate, which of the following are considered
to be typical temptations each may face?
to cooperate to act as a single monopoly and all of the above
Question 2
The main categories of market-oriented approaches to pollution control are
marketable permits; better-defined property rights; pollution charges.
Question 3
When exit occurs in a monopolistically competitive industry the
perceived demand and marginal revenue curves will shift to the right.
Question 4
In competitive settings, profits will lead firms to _________________ and losses will lead firms
___________, so the incentives for producing at low cost and coming up with new ways of pleasing
customers are strong.
enter the market; to exit
Question 5
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away
from the other, the total result is
they will simply neutralize one another's efforts.
, Question 6
If an externality of pollution exists for all manufacturers in a given industry, then all related
are no longer represented in their supply curves.
Question 7
The term ______________ refers to a situation where the firms supposedly being regulated end up
playing a large role in setting the regulations that they will follow.
regulatory capture
Question 8
Through the process of exit, monopolistically competitive firms remaining in the market
are no longer earning losses.
Question 9
Certain schools of economic thought suggest that a _____________ would reduce pollution in a
__________________, when compared to command-and-control regulation.
pollution tax; flexible, more cost-effective way
Question 10
Which of the following may be legal and even common practice in a market economy?
bundling several products together and selling them as a package
Question 11
Property rights are the legal rights of ownership on which others are
not allowed to infringe without paying compensation.
Question 12
Antitrust law includes specific rules against restrictive practices in particular because
