MicroEconomics, Theory and Applications 1 MCQs and Notes

M
Add MCQ, ...................................
📊 MicroEconomics, Theory and Applications 1
Q. Which of the following legal restrictions, if enforced effectively, would be likely to solve a prisoners’ dilemma type of problem for the firms involved?
  • (A) a law that prevents a cartel from enforcing rules against cheating
  • (B) a law that makes it illegal for oligopolists to engage in collusion
  • (C) a law that prohibits firms in an industry from advertising their services
  • (D) all of the above would be likely to solve a prisoners\ dilemma for the firms
💬 Discuss
✅ Correct Answer: (C) a law that prohibits firms in an industry from advertising their services
📊 MicroEconomics, Theory and Applications 1
Q. A prisoners’ dilemma is a game with all of the following characteristics except one. Which one is present in a prisoners’ dilemma?
  • (A) players cooperate in arriving at their strategies
  • (B) both players have a dominant strategy
  • (C) both players would be better off if neither chose their dominant strategy
  • (D) the payoff from a strategy depends on the choice made by the other player
💬 Discuss
✅ Correct Answer: (A) players cooperate in arriving at their strategies
📊 MicroEconomics, Theory and Applications 1
Q. Which of the following circumstances in an industry will result in a Nash equilibrium?
  • (A) all firms have a dominant strategy and each firm chooses its dominant strategy
  • (B) all firms have a dominant strategy, but only some choose to follow it
  • (C) all firms have a dominant strategy, and none choose it
  • (D) none of the above is correct
💬 Discuss
✅ Correct Answer: (A) all firms have a dominant strategy and each firm chooses its dominant strategy
📊 MicroEconomics, Theory and Applications 1
Q. In game theory, a choice that is optimal for a firm no matter what its competitors do is referred to as
  • (A) the dominant strategy
  • (B) the game-winning choice
  • (C) super optimal
  • (D) a gonzo selection
💬 Discuss
✅ Correct Answer: (A) the dominant strategy
📊 MicroEconomics, Theory and Applications 1
Q. Which of the following is an example of strategic behaviour?
  • (A) a firm builds excess capacity to discourage the entry of competitors
  • (B) a firm adopts the pricing behaviour of a dominant firm under the assumption that other firms will do likewise
  • (C) firms in an industry increase advertising expenditures to avoid losing market share
  • (D) all of the above are examples of strategic behaviour
💬 Discuss
✅ Correct Answer: (D) all of the above are examples of strategic behaviour
📊 MicroEconomics, Theory and Applications 1
Q. A firm that considers the potential reactions of its competitors when it makes a decision
  • (A) is referred to as a price leader
  • (B) is engaged in strategic behaviour
  • (C) is engaged in collusion
  • (D) is referred to as a barometric firm
💬 Discuss
✅ Correct Answer: (B) is engaged in strategic behaviour
📊 MicroEconomics, Theory and Applications 1
Q. 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
💬 Discuss
✅ Correct Answer: (B) there may be an incentive to cheat

More Faculties

Click on sub category to learn more.

📱 Download Our App

Learn MCQs on the go with our easy-to-use Android app

Get it on Google Play