Walden University ECON 1002 WEEK 5 QUIZ – Question and Answers (Correct Answers).
• Question 1
3 out of 3 points
An industry in which a
... [Show More] small number of large firms sell products that are either close or perfect substitutes is:
Selected Answer:
an oligopoly.
Correct Answer:
an oligopoly.
• Question 2
3 out of 3 points
Which of the following characteristics distinguishes an imperfectly competitive industry from a perfectly competitive industry?
Selected Answer:
The ability of firms to set their own price.
Correct Answer:
The ability of firms to set their own price.
• Question 3
0 out of 3 points
As a result of economies of scale, as output expands:
Selected Answer:
fixed costs are decreasing.
Correct Answer:
average total costs are decreasing.
• Question 4
3 out of 3 points
Suppose when a firm produces 1,000 units their total costs equal $5 million. When they produce 2,000 units their total costs equal $9 million. Which of the following statements is true regarding this firm?
Selected Answer:
This firm is experiencing economies of scale.
Correct Answer:
This firm is experiencing economies of scale.
• Question 5
3 out of 3 points
Price discrimination occurs when:
Selected Answer:
a firm charges different prices to different consumers for essentially the same good or service.
Correct Answer:
a firm charges different prices to different consumers for essentially the same good or service.
• Question 6
3 out of 3 points
As a result of the hurdle method of price discrimination:
Selected Answer:
economic surplus increases.
Correct Answer:
economic surplus increases.
• Question 7
0 out of 3 points
Game theory helps to understand the behavior of firms:
Selected Answer:
that are strategically independent.
Correct Answer:
that are strategically interdependent.
• Question 8
3 out of 3 points
A strategy that yields a higher payoff no matter what the other players in the game choose is known as a:
Selected Answer:
dominant strategy.
Correct Answer:
dominant strategy.
• Question 9
3 out of 3 points
A prisoner's dilemma occurs when:
Selected Answer:
each player has a dominant strategy, and the payoff to each player is smaller than what it would be if each had chosen a dominated strategy.
Correct Answer:
each player has a dominant strategy, and the payoff to each player is smaller than what it would be if each had chosen a dominated strategy.
• Question 10
3 out of 3 points
A way of changing incentives so as to make promises credible is known as:
Selected Answer:
a commitment device.
Correct Answer:
a commitment device. [Show Less]