Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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Part 1: Main Idea
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1.
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In a market economy with perfect competition, sellers
a. | control prices | b. | enter and exit the market
freely | c. | join with other sellers to influence prices | d. | have incomplete
information about market conditions |
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2.
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Some examples of standardized products include
a. | agricultural products, such as eggs and milk | b. | clothing products,
such as shirts and jeans | c. | electronic products, such as DVD players and
TVs | d. | furniture products, such as chairs and tables |
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3.
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In a market economy with imperfect competition sellers
a. | are always well-informed of market conditions | b. | never have any
control over price | c. | offer only standardized
products | d. | sometimes join with other sellers to influence prices |
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4.
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A market structure in which only one seller sells a product for which there are
no close substitutes is called a
a. | cartel | b. | monopoly | c. | oligopoly | d. | trust |
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5.
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Monopolists are able to control prices because they have
a. | much competition and there are many substitutes for their
products | b. | much competition and there are no close substitutes for their
products | c. | no competition and there are many substitutes for their products | d. | no competition and
there are no close substitutes for their products |
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6.
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Using advertising to try to convince customers to buy one product rather than
another is a form of
a. | antitrust competition | b. | focus competition | c. | monopolistic
competition | d. | nonprice competition |
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7.
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With monopolistic competition there are
a. | few sellers and few buyers | b. | few buyers but many sellers | c. | many buyers but few
sellers | d. | many buyers and many sellers |
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8.
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The expenses that a new business pay to enter a market are called
a. | basic costs | b. | entrance costs | c. | initiation
costs | d. | start-up costs |
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9.
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An oligopolist sells
a. | either standardized or differentiated products | b. | more standardized
than differentiated products | c. | only differentiated
products | d. | only standardized products |
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10.
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Laws that give government the power to control monopolies and to break them up
are called
a. | anticartel legislation | b. | antimonopoly legislation | c. | antimerger
legislation | d. | antitrust legislation |
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11.
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A merger happens when one company
a. | causes another company go bankrupt | b. | divides and forms several
firms | c. | joins another company to form a single firm | d. | sells their business
and reinvests in another market |
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12.
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Reducing or eliminating government control of business is called
a. | deregulation | b. | desisting | c. | disclosure | d. | discrimination |
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13.
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Buyers and sellers that are well-informed about market conditions are always
found in
a. | imperfect competition | b. | monopolistic competition | c. | nonprice
competition | d. | perfect competition |
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14.
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By controlling supply monopolists can control
a. | mergers | b. | needs | c. | price | d. | resources |
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15.
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A public utility, such as a water company, is an example of a
a. | geographic monopoly | b. | government monopoly | c. | natural
monopoly | d. | technological monopoly |
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16.
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The only gas station within a radius of 200 miles has a
a. | geographic monopoly | b. | government monopoly | c. | natural
monopoly | d. | technological monopoly |
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17.
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A chain of restaurants that specializes in roast beef sandwiches participates
in
a. | a focus group | b. | monopolistic competition | c. | an
oligopoly | d. | perfect competition |
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18.
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Sellers in monopolistic competition gain their limited monopoly by convincing
consumers that their product is
a. | approved by their competition | b. | different from the
competition | c. | as good as the competition | d. | identical to the
competition |
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19.
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The Sherman Anti-Trust Act gave the U.S. government the power to control
a. | the stock market | b. | monopolies | c. | the postal
service | d. | public utilities |
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Essay
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Part 3: Extended Response
Answer the following questions on the back
of this paper or on a separate sheet of paper.
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20.
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What are the characteristics of perfect competition?
Think
About:
- buyers and sellers
- products
- markets
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