AFRICA BEZA COLLEGE

Final Exam of Course: Micro Economics II

Department (Economics) Section - A Year – 2nd Semester -II A/Year- 2022/23
Program - Degree Division - Regular
Time allowed: 50 Min Load: 50%
Name_____________________________________Sec.______IDNumber________
Part I: Write ‘TRUE’ if the statement is correct and ‘FALSE’ if not correct! (1.5pt each).
________1. Oligopoly is the type of market structure in which there are many firms, which
produce or sell differentiated products.
________2. In non-collusive oligopoly there is no cooperation among the rival firms.
________3. Any situation in which individuals must make strategic choices and in which the outcome
will depend on what each person chooses to do can be viewed as a game.
________4. The game theory assumes that players are interested in minimizing their payoffs.
________5. A game is non-cooperative if negotiation and enforcement of a binding contract are not
possible.
Part II: Choose the Correct answer from the given alternatives and give your answer
on the space provided for each question!(1.5 pt each).
_____6. Which of the following is/are not characteristics of oligopoly market structure? A. few sellers
B. Barrier to Entry C. many sellers D. All E. None
Which of the following is an example of payoffs for the firms ? A. profit B. Advertising C. Price
competition D. All E. None
_____7. Cartels are most likely to arise in which of the following market structures?
A. Perfect competition. B. Monopolistic Competition C. Oligopoly D. Monopoly
_____8. Game theory assumes that players are interested in maximizing their payoffs, this show: A.
Rationality B. Common knowledge C. Agreement D. All E. None
_____9. Which of the following is/are not determinants of market Supply of labor? A. wage rate B.
tastes of consumers C. size of the population D. All E. None
_____10. When a consumption or production activity has an indirect effect on other consumption or
production activities that is not reflected directly in market prices it is called:
A. Consumption B. Production C. Externality D. All E. None
_____11. Which of the following shows the maximum amount of either commodity that the economy
can produce, given the amount of the other commodity that the economy is producing? A. Indifference
curve B. Isoquant curve C. Production possibility frontier D. None
_____12. __________ in each market determine the equilibrium price and quantity in that market.
Supply and demand B. Market size C. Government D. None
_____13. Which of the following is/are assumption of general equilibrium of production?
A. Produces only two commodities B. Uses only two production inputs C. production inputs are
substituted for each other D. All
_____14. Each course of action open to a player during a game is: A. Win B. Strategy C. Player D.
None
Part III. Match the following under column A with column B
_____15. Perfectly substituted goods A. Monopoly
_____16. Few sellers B. Monopolistic competitive
_____17. Differentiated products C. Demand
_____18. Factor of production D. Oligopoly
_____19. Single seller E. Identical product
F. Labor
Part IV. Fill the Blank Spaces with the correct answer
20. A special case of oligopoly in which there are only two firms in the industry is ___________
21._______________ is concerned with the evaluation of alternative economic situations, based on
their implication for social well-being.
22. Each decision maker in a game is _________________
23. Scale of economics and large capital requirement in oligopoly than other markets except
_______________________________
Part V. Write Short Answer On the Space Provided
24. Write main types of collusive oligopoly______________________________________________
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Set By: Cherinet A.