Chapter 5

Question 1

refers to the competitive environment

Answer 1

Market structures

Question 2

any factor or industry characteristics that creates ad
advantage for incumbents over the new arrivals.

Answer 2

Barriers to entry

Question 3

Two types of barriers to entry

Answer 3

Legal rights
Substantial economies of scale

Question 4

Name all the legal rights

Answer 4

Patents
Tariffs
Quotas
Franchise monopoly

Question 5

Name all the substantial economies of scale

Answer 5

Large capital
Skilled labor requirements
High technology

Question 6

Name all the types of market structure: competition

Answer 6

Perfect competition
Imperfect competition

Question 7

any restrictions on the ability of incumbents to redeploy assets from one industry or line of business to another.

Answer 7

Barriers to exit

Question 8

type of market competition which considered as desirable for social welfare.

Answer 8

Perfect competition

Question 9

• no one holds the market power
• no one controls price and quantity

Answer 9

Perfect competition

Question 10

prevails in an industry whenever individual seller have some measured of control over the Market Price.

Answer 10

Imperfect competition

Question 11

• few people have control in the price

Answer 11

Imperfect competition

Question 12

Name all the kinds of imperfect competition

Answer 12

Monopoly
Oligopoly
Monopolistic Competition

Question 13

Greek word: Mono meaning ____, Polist meaning _____

Answer 13

Monopoly, one, seller

Question 14

Few but big sellers

Answer 14

Oligopoly

Question 15

they occurs when two or more firms jointly set their Price of outputs, divide the markets among themselves or make decision jointly.

Answer 15

Collusion

Question 16

Individual firms, act as unison

Answer 16

Cartel

Question 17

there are many sellers but produces differentiated products.

Answer 17

Monopolistic competition

Question 18

Firms in this industry has little market power to influence the level of market price.

Answer 18

Monopolistic competition

Question 19

is a theoretical framework for conceiving social situations among competing players.

Answer 19

Game theory

Question 20

It is the science of strategy, or at least the optimal decision-making of independent and competing actors in a strategic setting.

Answer 20

Game theory

Question 21

Key pioneers of game theory were?

Answer 21

Mathematician John von Neumann and Economist Oskar Morgenstern in the 1940s

Question 22

He is regarded by many as providing the first significant extension of the von Neumann and Morgenstern work

Answer 22

Mathematician John Nash

Question 23

Any set of circumstances that has a result dependent on the actions of two or more decision-makers (players)

Answer 23

Game

Question 24

A strategic decision-maker within the context of the game

Answer 24

Players

Question 25

A complete plan of action a player will take given the set of circumstances that might arise within the game

Answer 25

Strategy

Question 26

The payout a player receives from arriving at a particular outcome (The payout can be in any quantifiable form, from dollars to utility.)

Answer 26

Payoff

Question 27

The information available at a given point in the game (The term _____________ is most usually applied when the game has a sequential component.)

Answer 27

Information set

Question 28

The point in a game where both players have made their decisions and an outcome is reached

Answer 28

Equilibrium

Question 29

difficulty of making decisions under uncertainty

Answer 29

Prisoner's Dilemma Decision under UNCERTAINTY

Question 30

A game situation in which there is a tension between the collective interest of all of the players and the self-interest of individual players.

Answer 30

Prisoner's Dilemma Decision under UNCERTAINTY

Question 31

is an outcome reached that, once achieved, means no player can increase payoff by changing decisions unilaterally.

Answer 31

Nash Equilibrium

Question 32

It can also be thought of as "no regrets," in the sense that once a decision is made, the player will have no regrets concerning decisions considering the consequences.

Answer 32

Nash equilibrium