chp 17

Question 1

game theory

Answer 1

the study of how people behave in a strategic situation

Question 2

collusion

Answer 2

an agreement among firms in a market about quantities to produce or prices to change

Question 3

cartel

Answer 3

a group of firms acting in unison

Question 4

oligopolists maximize their total profits by forming a cartel and acting like a _______

Answer 4

monopolist

Question 5

the larger the number of firms in the oligopoly, the closer the quantity and price will be to the level of a _________ __________

Answer 5

perfect competition

Question 6

Nash Equilibrium

Answer 6

economic actors interacting with one another all choose their own best strategy and stick to it

Question 7

prisoners dilemma

Answer 7

a game between two prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial

Question 8

dominant strategy

Answer 8

a strategy that is best for a player in a game regardless of the strategies chosen by the other players

Question 9

policymakers use ________ laws to prevent oligopolies from engaging in behaviour that reduces competition.

Answer 9

anti-competition

this can be controversial cause behaviours sometimes have legitimate purposes.