Activity No. 2 FM2C Basic Microeconomics

_______ are those which a small number of firms dominate.

• Monopoly

• Monopolistic Competition

• Oligopoly

• Oligopolistic Competition

________ feature a large number of competing firms, but the products that they sell are not identical.

• Monopoly

• Monopolistic Competition

• Oligopoly

• Oligopolistic Competition

Answer explanation

A group of firms that have a formal agreement to collude to produce the monopoly output and sell at the monopoly price is called a _________.

• Collude

• Collusion

• Cartel

• Merger

When firms act together in this way to reduce output and keep prices high, it is called _________.

• Collude

• Collusion

• Cartel

• Merger

____________ wrote in Wealth of Nations in 1776: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

• John Maynard Keynes

• David Ricardo

• Adam Smith

• Thomas Malthus

a branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs based on what other players decide to do.

• Basic Calculus

• Geometry

• Game Theory

• Econometrics

a pressure that a firm can exert on which competing oligopoly firms commit to match price cuts, but not price increases.

• Anti-Trust Law

• Four-Firm Concentration Ratio

• The Herfindahl-Hirschman Index

• Kinked Demand Curved

___________which measures the combined market share (or percent of total industry sales) which is accounted for by the largest firms (typically the top four to eight).

• Anti-Trust Law

• Four-Firm Concentration Ratio

• The Herfindahl-Hirschman Index

• Kinked Demand Curved

________ calculates by summing the squares of the market share of each firm in the industry.

• Anti-Trust Law

• Four-Firm Concentration Ratio

• The Herfindahl-Hirschman Index

• Kinked Demand Curved

________ practices that do not involve outright agreements to raise price or to reduce the quantity produced, but that might have the effect of reducing competition.

• Restrictive

• Exclusive Dealing

• Tying sales

• bundling