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Commerce and BusinessbackBusinessbackPrinciples of EconomicsbackEconomicsbackPractice Set 2495back

Imperfect Competition And Strategic Behaviour

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Question 1
Free
Multiple Choice

An example of a Canadian industry composed of a few large firms is

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A

the accounting profession.

B

clothing retailing.

C

gasoline retailing.

D

restaurants.

E

hair dressers.

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Question 2
Free
Multiple Choice

A Canadian industry composed of many small firms is

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A

steel manufacturing.

B

automobile production.

C

gasoline retailing.

D

restaurants.

E

natural gas transmission.

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Question 3
Free
Multiple Choice

By calculating a concentration ratio,economists measure the

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A

degree to which a monopolist's output is lower than in perfect competition.

B

control of a monopolist over its input prices.

C

fraction of total industry sales accounted for by the largest firms.

D

degree to which firms in the industry use similar technologies.

E

concentration of firms in one geographic location.

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Question 4
Free
Multiple Choice

In Canada,concentration ratios are the highest in

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A

tobacco products.

B

petroleum and coal products.

C

mining.

D

machinery.

E

clothing industries.

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Question 5
Free
Multiple Choice

The table below shows the market shares for the only firms in a domestic cement market.
image TABLE 11-1
-Refer to Table 11-1.The four-firm concentration ratio in this industry is ________ %.

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A

100

B

92

C

85

D

67

E

45

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Question 6
Multiple Choice

The table below shows the market shares for the only firms in a domestic cement market.
image TABLE 11-1
-Refer to Table 11-1.The eight-firm concentration ratio in this industry is ________ %.

Choose correct answer/s
A
100
B
92
C
85
D
67
E
45
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Question 7
Multiple Choice

Suppose the 2-firm concentration ratio (measuring output)in a Canadian manufacturing industry is over 90%.Why might the market power of these 2 firms be less than the concentration ratio suggests?

Choose correct answer/s
A
The product is purely domestic and there is no international trade.
B
A high concentration ratio usually indicates low degrees of market power.
C
The product is traded internationally and the two Canadian firms compete with many global rivals.
D
The relevant market is regional and so the concentration ratio is not relevant.
E
A 2-firm concentration ratio does not provide enough information.
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Question 8
Multiple Choice

Suppose the market for gasoline retailing (gas stations)in an island economy has 12 firms.The two largest firms each account for 30% of sales,the third accounts for 15%,the fourth for 7%,the fifth for 4% and the remaining firms for 2% each.What is the four-firm concentration ratio?

Choose correct answer/s
A
8%
B
60%
C
75%
D
82%
E
100%
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Question 9
Multiple Choice

Suppose the market for gasoline retailing (gas stations)in an island economy has 12 firms.The two largest firms each account for 30% of sales,the third accounts for 15%,the fourth for 7%,the fifth for 4% and the remaining firms for 2% each.Which of the following statements best describes the structure of this local industry?

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A
This industry is an oligopoly.
B
This industry is perfectly competitive.
C
This industry is a monopoly.
D
This industry is monopolistically competitive.
E
Either A or D could be correct.
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Question 10
Multiple Choice

Which of the following products is best considered a differentiated product?

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A
wheat
B
steel
C
soap
D
topsoil
E
sugar
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Question 11
Multiple Choice

An imperfectly competitive industry is often allocatively inefficient when compared to the performance of a competitive industry,because imperfect competitors

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A
maximize profits.
B
make profits.
C
obtain economies of scale.
D
operate in the global economy.
E
set price above the marginal cost.
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Question 12
Multiple Choice

A characteristic common to most imperfectly competitive markets is

Choose correct answer/s
A
inelastic market demand curves.
B
a homogeneous product.
C
non-price competition among firms.
D
unexploited economies of scale.
E
common pricing among firms.
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Question 13
Multiple Choice

In an imperfectly competitive market,changes in market conditions are often signalled to the individual firms by a change in the

Choose correct answer/s
A
firm's sales.
B
price of the product.
C
government policy.
D
cost conditions.
E
elasticity of supply.
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Question 14
Multiple Choice

A monopolistically competitive firm and a monopoly are similar because

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A
both firms will earn zero profits in the long run.
B
both firms always operate at their point of minimum average cost.
C
each firm can raise its price without losing all of its sales.
D
both firms must behave strategically toward other firms in the industry.
E
each firm has a large number of competitors.
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Question 15
Multiple Choice

A monopolistically competitive firm and a monopoly are similar because

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A
both firms will earn zero profits in the long run.
B
both firms always operate at their point of minimum average cost.
C
they each face a downward-sloping demand curve.
D
both firms must behave strategically toward other firms in the industry.
E
each firm has a large number of competitors.
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Question 16
Multiple Choice

In which market structure are price fluctuations most common?

Choose correct answer/s
A
price fluctuations occur with the same frequency in all market structures
B
monopoly
C
oligopoly
D
monopolistic competition
E
perfect competition
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Question 17
Multiple Choice

In imperfectly competitive markets,"administered" prices usually change ________ than prices in perfectly competitive markets,because ________ .

Choose correct answer/s
A
more often; they are more flexible
B
more often; perfectly competitive firms are price takers
C
more often; price becomes a strategic choice
D
less often; changing prices is costly
E
less often; changing prices is costless
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Question 18
Multiple Choice

One difference between a perfectly competitive market and a monopolistically competitive market is that

Choose correct answer/s
A
there are no barriers to entry in monopolistic competition.
B
there are no barriers to exit in monopolistic competition.
C
there is no product differentiation in perfect competition
D
there is no product differentiation in monopolistic competition
E
there is strategic interaction among firms in monopolistic competition.
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Question 19
Multiple Choice

Which of the following characteristics is NOT associated with imperfectly competitive markets?

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A
firms are price setters
B
products are differentiated
C
firms engage in non-price competition
D
firms are price takers
E
firms can shift the demand curve for their product by advertising
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Question 20
Multiple Choice

Which of the following characteristics is NOT typically associated with imperfectly competitive market structures?

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A
each firm faces a downward sloping demand curve
B
products are differentiated
C
firms engage in non-price competition
D
each firm faces a horizontal demand curve for its product
E
firms can shift the demand curve for their product by advertising
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