Chapter 24

Question 1

The concentration ration is the percentage of ____ earned by the _____largest firms in the industry.

Answer 1

A. Sales; four

Question 2

The tobacco, healthcare wholesale, and beverage industries all have a concentration ration of over____.

Answer 2

C. 80

Question 3

________ is(are) legal in the United States.

Answer 3

B. Cut throat competition

Question 4

A highly oligopolized industry would have a _____Herfindahl-Hirschman Index and a _____ concntration ratio.

Answer 4

A. high; high

Question 5

Which statement is false #1?
A. Oligopolies are illegal in most states
B. Most oligopolies engage in outright collusion
C. Ford Motor company is an oligopoly
D. None of these statements is false.

Answer 5

A. Oligopolies are illegal in most states

Question 6

A Herfindahl-Hirschman Index of 10,000 would mean there is (are) how many firm(s) in the industry?

Answer 6

A. 1

Question 7

The market structure in which the behavior of an given firm depends on the behavior of the other firms in the industry is

Answer 7

C. Oligopoly

Question 8

Which one of these firms would be an oligopolist?

Answer 8

A. Proctor and Gamble

Question 9

Which statement is false #2?
A. Cigarettes, motor vehicles, and pepelines are industries with high concentrations ratios.
B. Oligopolized industries have higher concentration ratios than monopolistic competitors.
C. The Elecric Machinery Conspiracy case involved covert collusion.
D. None is false

Answer 9

D. None is false

Question 10

Oligopoly is characterized by

Answer 10

C. high barriers to entry

Question 11

The closer the industry concentration ration is to 100, the more likely it is that

Answer 11

C. there is a small number of large firms

Question 12

Market share questions with chart #1? Which is the highest concentration ration

Answer 12

B. is in the Industry Y.

Question 13

Market share questions with chart #2? Which is the highest Herfindahl-Hirschman Index

Answer 13

A. is in the Industry X

Question 14

A exmaple of an oligopoly market would be in which _____firm(s) sell(s) _____% of the output.

Answer 14

C. 4;80

Question 15

Each of the following is an oligopoly except

Answer 15

D. Microsoft (computer operation systems)

Question 16

Which of the following represents an illegal control of prices?

Answer 16

A. Colluding

Question 17

A cartel is

Answer 17

B. a group of firms acting under collusion to control output and maximize group profits

Question 18

Which of the following is a legal way to reduce the price problems oligopolies face?

Answer 18

C. Price leadership

Question 19

If the market share of the largest firm is an industry is 50%, then theoretically, the highest possible Herfindahl-Hirschman Index for this industry would be

Answer 19

B. 5000

Question 20

An industry with four firms each having a 25% market share would have a HErfindahl-Hirschman Index (HHI) of

Answer 20

D. 2,500

Question 21

At one end of the competitive spectrum is cutthroat competition. At the other end is (the)

Answer 21

A. Cartel

Question 22

A concentration ratio of 100 would imply that the industry has _____.

Answer 22

B. no more than four firms

Question 23

Corporate concentration can be measured by

Answer 23

C. both the concentration rato and the Herfindahl-Hirschman index

Question 24

As foreign imports become a greater percentage of sales in oligopolized industries, the concentration ratio and the Herfindahl-Hirschman index

Answer 24

B. become less accurate as a measure of concentration

Question 25

Which statement is true #1?
A. The hgiher the concentration ratio, the higher the degree of oligopolization.
B. The lower the concentration ration, the higher the degree of oligopolization
C. The concentration ratio remains constant as teh degree of oligopolization rises.
D. There is no relationship between the concentration ratio and teh degree of oligopolization.

Answer 25

A. The hgiher the concentration ratio, the higher the degree of oligopolization.