..12..objective.

Question 1 If a few firms dominate an industry the market is known as: a) Monopolistic competition b) Competitively monopolistic c) Duopoly d) Oligopoly Question 2 In a cartel member firms may be given afixed amount to produce. This amount is called a: a) Limit b) Factor c) Quota d) Quotient Question 3 In the Kinked Demand Curve theory it is assumed that: a) An increase in price by the firm is not followed by others b) An increase in price by the firm is followed by others c) A decrease in price by the firm is not followed by others d) Firms collude to fix the price Question 4 The Kinked Demand Curve theory assumes: a) Firms cooperate b) Firms act as part of a cartel c) Firms are competitive with each other d) Firms are not profit maximizers Question 5 In Game Theory: a) Firms are always assumed to act independently b) Firms are always assumed to cooperate with each other c) Firms always collude as part of a cartel d) Firms consider the actions of others before deciding what to do Question 6 In the Kinked Demand Curve theory: a) The marginal revenue curve is perfectly horizontal b) Demand is always price inelastic c) Demand is always price elastic d) Non price competition is likely Question 7 In oligopoly a) The largest four firms are likely to have a small market share b) The price is likely to equal marginal revenue c) Firms will continue to produce in the long run if price is less than average cost d) Firms may collude or compete depending on their assumptions about their competitors Question 8 A model of Game Theory of oligopoly is known as the: a) Prisoner's Dilemma b) Monopoly Cell c) Jailhouse Sentence d) Jury Box Question 9 In cartels: a) Each individual firm profit maximizes b) There may be an incentive to cheat c) The industry as a whole is loss making d) There is no need to police agreements Question 10 In a cartel: a) Firms compete against each other b) Price wars are common c) Firms use price to win market share from competitors d) Firms collude