A:  the dominant firm will set the industry price and the fringe firms will also make their price.

（ ） is the difference between the maximum amount consumers are willing to pay for a good and the amount they actually pay。
A:social welfare
B:government surplus
C:consumer surplus
D:producer surplus
答案: consumer surplus

If a firm could have the ability to set price above ( ), then we can say it has market power.

A:

average cost

B:

marginal cost

C:

maximum profit

D:

total cost

答案:

marginal cost

In a perfectly competitive market, transaction costs are zero for (    )

A:

only buyers

B:

buyers

C:

only sellers

D:

sellers

答案:

buyers

,

sellers

In a perfectly competitive market,
transaction costs are zero for both buyers and sellers.
A:对
B:错
答案: 对

The profit-maximizing rule tells a firm to produce that quantity of output for which marginal revenue equals marginal cost.
A:错
B:对
答案: 对

Economists often evaluate the welfare effects of changes in market structure or of government policies by looking at changes in consumer surplus.
A:错
B:对
答案: 错

A monopoly is the sole producer of a good for which there are no close substitutes
A:对
B:错
答案: 对

The Lerner Index indicates that a monopolist has unlimited control over price.
A:对
B:错
答案: 错

If the elasticity equals -10,the Lerner Index equals 0.01
A:错
B:对
答案: 错

If monopolization of an industry raises costs, the deadweight loss is larger
A:错
B:对
答案: 对

The competitive market equilibrium is allocatively efficient: It maximizes the sum of consumer and producer surplus.
A:对
B:错
答案: 对

The deadweight loss triangle is a measure of the misallocation of resources resulting
from monopoly.
A:错
B:对
答案: 对

The simple comparison of competition and monopoly highlights the resource misallocation associated with market power.
A:对
B:错
答案: 对

Producer surplus is the difference between the (  )the producer receives for selling a unit of output and its reservation (  ）

A:market price, demand price
B:marginal price, demand price

C:demand price, market price
D:market price, supply price
答案: market price, supply price

Market share is the firm’s percentage share of the market’s total sales revenue. It ranges from zero up to ( ) percent.
A:10000
B:100
C:80
D:1000
答案: 100

The HHI number can range from (  ) to （ ）。

A:

0, 10000

B:

0, 5000

C:

1000,1000

D:

100,100

答案:

0, 10000

Vertical merger involves firms that produce at ( ) of production in the same industry.
A:unrelated stages
B:same stages
C:market extensions
D:different stages
答案: different stages

The motives for merger are （ ）。
A:risk reduction
B:financial motives
C:reduce entry barriers
D:market power
答案: risk reduction,financial motives,reduce entry barriers,market power

Static or structural barriers to entry include （ ）。
A:economies of scale
B:capital costs
C:product differentiation
D:absolute cost advantages
答案: economies of scale,capital costs,product differentiation,absolute cost advantages

A too-broad definition includes too many firms, with the result that reported measures of market power tend to be biased downward.
A:错
B:对
答案: 对

Entry and exit conditions are important determinants of existing firms’ market power.
A:对
B:错
答案: 对

Firms within the industry have control over structural barriers to entry
A:错
B:对
答案: 错

Behavioral or strategic barriers to entry are those existing firms might deliberately behave in ways that decreased the probability of entry by other firms
A:对
B:错
答案: 对

Established firms has absolute cost advantages over potential entrants.
A:错
B:对
答案: 对

Product differentiation creates an advantage for established firms relative to newcomers.
A:对
B:错
答案: 错

Expecting profitability is an incentives to enter
A:对
B:错
答案: 对

Any cost that a firm must incur to leave an industry is an exit barrier ,which is generally thought of as some type of marginal cost.
A:对
B:错
答案: 错

Industries with high rates of entry tend to have high rates of exit
A:错
B:对
答案: 对

Each source of entry barriers can also erect a barrier to exit by going firms.
A:对
B:错
答案: 对

 In a market with a dominant firm, it makes sense to assume that (    )

A:

 the dominant firm will set the industry price and the fringe firms will also make their price.

B:

the dominant firm will set the industry price and the fringe firms will take that price as given.

C:

none of the above

D:

the fringe firms will set the industry price and the dominant firm will take that price as given.

答案:

the dominant firm will set the industry price and the fringe firms will take that price as given.

In US Steel model, we can find the dominant firm’s residual demand curve by subtracting the fringe supply curve from the total demand curve at every price greater than P = $25.
A:错
B:对
答案: 对

According to the assumption of “ Entry is free” in the theory of contestable market, (    )

A:The rest of the choices are wrong
B:

Entrants could be on completely equal footing with established firms, but could not be with an established monopolist.

C:

 Entrants could be on completely equal footing with established firms, even with an established monopolist.

D:

Entrants could not be on completely equal footing with established firms, even with an established monopolist.

答案:

 Entrants could be on completely equal footing with established firms, even with an established monopolist.

According to contestable market assumption, absolute entry implies that the entry lag is more than the price adjustment lag: a new firm can enter a market and sell its product before the established firms can react and change their prices.

A:对
B:错
答案: 错

According to theory of contestable market assumption, the assumption of no sunk costs implies that a firm could sell its production facilities for their present value in a resale market or could use them in another market without any losses.

A:错
B:对
答案: 对

If a consumer feels much better as more consumers use “wechat”, the network externality is (     )

A:

zero

B:

negative

C:

positive

D:

not sure

答案:

positive

Negative Externality exists when consumers are better off as the number of users of the same brand increases
A:错
B:对
答案: 错

Direct Network Externality refers to the benefit to an individual consumer depends directly on the number of other users of the product.
A:对
B:错
答案: 对

Indirect Network Externality arises because of complementarity.
A:对
B:错
答案: 对

In email’s application, it shows network externality and it should be negative.

A:错
B:对
答案: 错

 Let X1 stand for a measure of market structure and
Y for a measure of economic profits, we can express the hypothesis about the relationship between market structure and profits using a simple linear equation as: , is an error term.
A:错
B:对
答案: 对

In figure 1(a), hypothetical scatter diagram of data on Y(economic profits) and X1(market structure), the vertical distance between each data point and a straight line fitted through the observations is called the ( )
A:error term
B:residual
C:variance
D:deviation
答案: residual

The Lerner Index is difficult to estimate because data are lacking on firms’ marginal costs.
A:错
B:对
答案: 对

 Excess return on sales is the ratio of economic profits to sales cost.
A:对
B:错
答案: 错

Economic profits are difficult to calculate.
A:对
B:错
答案: 对

Tobin’s q has several advantages over rate of return measures ( ).
A:q is much less sensitive to errors in measuring its components than are profits.
B:q reflects the operations of the entire firm, creating complications for diversified firms.
C:The market value of a firm depends partly on risk, so q incorporates an adjustment for risk.
D:The numerator of q, market value, reflects expected future profits, whereas accounting data reflect only past profits.
答案: q is much less sensitive to errors in measuring its components than are profits.,The market value of a firm depends partly on risk, so q incorporates an adjustment for risk.,The numerator of q, market value, reflects expected future profits, whereas accounting data reflect only past profits.

In the measuring of capital requirements, typically measured by the estimated amount of capital required by a midpoint plant.
A:对
B:错
答案: 对

Many economists have used proxies for entry barriers as independent variables in their regression equations. Commonly used measures of barriers to entry include the following ( ):
A:Research intensity
B:Economies of scale
C:Capital requirements
D:Product differentiation
答案: Research intensity,Economies of scale,Capital requirements,Product differentiation

Advertising and other forms of product differentiation are expected to have less effect on concentration and profitability in producer goods industries than in consumer goods industries, ( )
A:because buyers in producer goods industries tend to be small and well informed.
B:because buyers in producer goods industries tend to be large and not well informed.
C:because buyers in producer goods industries tend to be large and well informed.
D:because buyers in producer goods industries tend to be medium and well informed.
答案: because buyers in producer goods industries tend to be large and well informed.

In the measuring of economies of scale, often approximated by the ratio of midpoint plant sales (the sales of the plant in the middle of the size distribution of plants) to total industry sales.
A:错
B:对
答案: 对

The Waldman model is a game of perfect information because both trucks move simultaneously to pick a location.
A:对
B:错
答案: 错

In Waldman model, if both locate at the same point, the trucks split sales 50-50.
A:错
B:对
答案: 对

A dominant strategy is a strategy that outperforms any other strategy no matter what strategy an opponent selects.
A:错
B:对
答案: 对

Although all dominant solutions are Nash equilibria, some games without a dominant solution can have ( ) Nash equilibrium.
A:one
B:not sure
C:no
D:more than one
答案: more than one

If Waldman plays a strategy that minimizes the maximum possible outcome for Other Truck, Waldman will be playing his dominated strategy.
A:错
B:对
答案: 错

General Electric (GE) and Westinghouse game is of imperfect information because GE and Westinghouse simultaneously select prices.
A:错
B:对
答案: 对

A dominated strategy is a strategy that can always be beaten by some other strategy.
A:对
B:错
答案: 对

In sequential games, the players take turns moving instead of moving simultaneously.

A:错
B:对
答案: 对

one of the characteristics of all mixed strategy equilibria is that once the equilibrium is obtained, both players are indifferent between playing their equilibrium strategy and any other strategy.
A:错
B:对
答案: 对

A mixed strategy Nash equilibrium is inherently stable because profits are the same regardless of the strategy adopted by the firms, and therefore, both firms have little incentive to maintain the equilibrium.
A:对
B:错
答案: 错

In the Stackelberg Model, one firm make choice first, then another one will select output level.
A:错
B:对
答案: 对

In Bertrand Model, two firms select output of the products in order to maximize profit.
A:错
B:对
答案: 错

Cournot’s duopoly model is used to describe an industry structure in which companies compete on the price of product they will produce, which they decide on independently of each other and at the same time.
A:对
B:错
答案: 错

In Cournot’s duopoly model, two firms face identical costs.
A:对
B:错
答案: 对

Cournot’s duopoly model assumption includes( ):
A:two firms face identical costs
B:each firm believes that its competitor will always maintain its current output.
C:there is product differentiation
D:there is no collusion
答案: two firms face identical costs,each firm believes that its competitor will always maintain its current output.,there is no collusion

In equilibrium, among Cournot output, joint profit-maximizing output and the perfectly competitive output, if we were to sort by the output level from the largest to the smallest, it should be( ):
A:joint profit-maximizing output, Cournot output, the perfectly competitive output
B:the perfectly competitive output, Cournot output, joint profit-maximizing output
C:Cournot output, joint profit-maximizing output, the perfectly competitive output
D:joint profit-maximizing output, the perfectly competitive output, Cournot output
答案: the perfectly competitive output, Cournot output, joint profit-maximizing output

Cournot equilibrium is not a Nash equilibrium
A:错
B:对
答案: 错

The Cournot–Nash game is a sequential game.
A:对
B:错
答案: 错

The Stackelberg equilibrium yields a greater total industry output and higher price than the Cournot–Nash equilibrium.
A:错
B:对
答案: 错

In the Southwest- U.S. Airways’ fare competing game, any fare less than MC = $70 will result in one airline reducing fares, which in turn will result in a fare reduction by the other, and so on.
A:错
B:对
答案: 错