End of Semester Test Questions and
Answers
1.In a game, a Nash equilibrium is reached only if the players
A) have no best response for the choices made by other players.
B) understand the game and the payoffs associated with each strategy.
C) use backward induction method to develop their strategies.
D) follow a mixed strategy.
Answer B) understand the game and the payoffs associated with each
strategy.
2.A profit maximizing monopoly's price is
A) less than the price that would prevail if the industry was perfectly
compet- itive.
B) not consistently related to price that would prevail if the market
was perfectly competitive.
C) greater than the price that would prevail if the industry was
perfectly competitive.
D) the same as the price that would prevail if the industry was perfectly
com- petitive.
Answer C) greater than the price that would prevail if the industry was
perfectly competitive.
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15
, 3.The incidence of a tax depends on whether the government collects the
tax from buyers or sellers.
True or False
Answer False
4.Some superstar athletes in the sports industry earn very high levels of
income relative to other occupations, and over time the wage differential
has been increasing. What could have caused this?
A) The supply of star athletes has decreased.
B) The market power of athletes' unions has increased.
C) Technological advances such as cable television has increased the
demand for sports entertainment.
D) The supply of star athletes has increased due to college athletic programs.-
Answer C) Technological advances such as cable television has increased
the demand for sports entertainment.
5.If in the market for peaches the supply curve has shifted to the left,
A) the quantity of peaches supplied has increased.
B) the supply of peaches has decreased.
C) the supply of peaches has increased.
D) the quantity of peaches supplied has decreased.
Answer B) the supply of peaches has decreased.
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15
Answers
1.In a game, a Nash equilibrium is reached only if the players
A) have no best response for the choices made by other players.
B) understand the game and the payoffs associated with each strategy.
C) use backward induction method to develop their strategies.
D) follow a mixed strategy.
Answer B) understand the game and the payoffs associated with each
strategy.
2.A profit maximizing monopoly's price is
A) less than the price that would prevail if the industry was perfectly
compet- itive.
B) not consistently related to price that would prevail if the market
was perfectly competitive.
C) greater than the price that would prevail if the industry was
perfectly competitive.
D) the same as the price that would prevail if the industry was perfectly
com- petitive.
Answer C) greater than the price that would prevail if the industry was
perfectly competitive.
1/
15
, 3.The incidence of a tax depends on whether the government collects the
tax from buyers or sellers.
True or False
Answer False
4.Some superstar athletes in the sports industry earn very high levels of
income relative to other occupations, and over time the wage differential
has been increasing. What could have caused this?
A) The supply of star athletes has decreased.
B) The market power of athletes' unions has increased.
C) Technological advances such as cable television has increased the
demand for sports entertainment.
D) The supply of star athletes has increased due to college athletic programs.-
Answer C) Technological advances such as cable television has increased
the demand for sports entertainment.
5.If in the market for peaches the supply curve has shifted to the left,
A) the quantity of peaches supplied has increased.
B) the supply of peaches has decreased.
C) the supply of peaches has increased.
D) the quantity of peaches supplied has decreased.
Answer B) the supply of peaches has decreased.
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15
