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Taxation of individuals and business entities solutions

01/05/2021 Client: muhammad11 Deadline: 2 Day

Multiple Choice Questions
1. The key feature of an oligopolistic market is that
a. Each firm produces a different product from other firms.
b. A single firm chooses a point on the market demand curve.
c. Each firm takes the market price as given.
d. A small number of firms are acting strategically.
2. If an oligopolistic industry organizes itself as a cooperative cartel, it will produce a quantity of output that is __________ the competitive level and __________ the monopoly level.
a. Less than, more than
b. More than, less than
c. Less than, equal to
d. Equal to, more than
3. If an oligopoly does not cooperate and each firm chooses its own quantity, the industry will produce a quantity of output that is __________ the competitive level and __________ the monopoly level.
a. Less than, more than
b. More than, less than
c. Less than, equal to
d. Equal to, more than
4. As the number of firms in an oligopoly grows large, the industry approaches a level of output that is __________ the competitive level and __________ the monopoly level.
a. Less than, more than
b. More than, less than
c. Less than, equal to
d. Equal to, more than
5. The prisoners' dilemma is a two-person game illustrating that
a. The cooperative outcome could be worse for both people than the Nash equilibrium.
b. Even if the cooperative outcome is better than the Nash equilibrium for one person, it might be worse for the other.
c. Even if cooperation is better than the Nash equilibrium, each person might have an incentive not to cooperate.
d. Rational, self-interested individuals will naturally avoid the Nash equilibrium because it is worse for both of them.
6. The antitrust laws aim to
a. Facilitate cooperation among firms in oligopolistic industries.
b. Encourage mergers to take advantage of economies of scale.
c. Discourage firms from moving production facilities overseas.
d. Prevent firms from acting in ways that reduce competition.

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