Unit 2 Test Review 3

In an effort to make college housing more affordable, the state of Arizona has passed a law that places a price ceiling on apartments near campus. What is the result of this law on the apartment market?

• More apartments are rented at the lower price, creating a surplus.

• The supply of the apartments shifts right, raising the price.

• The demand for apartments shifts right, lowering the price.

• Fewer apartments are rented at the lower price, creating a shortage.

Suppose the government decides to try to help rice farmers by imposing a price floor on rice of $1 per bushel. Assuming that the equilibrium price of rice is currently 60 cents per bushel, what will be the effect of the price floor?

• Quantity demanded will rise and a shortage will result.

• Quantity supplied will rise and a surplus will result.

• The demand will shift to the left and a surplus will result.

• The supply will shift to the right and a shortage will result.

Monopolistic competition is the market structure that has all the conditions of perfect competition except

• name-brand products

• a variety of products

• identical products

• expensive products

When would the Federal Trade Commission issue a cease and desist order?

• when a geographic monopoly occurs

• when there is perfect competition

• when too many positive externalities exist

• when price fixing occurs

Which of the following is an industry close to perfect competition?

• automobile companies

• clothing

• gas stations

• truck farming

In which market structure is the market price likely to be the lowest?

• perfect competition

• oligopoly

• monopoly

• monopolistic competition

What type of business is most likely t have an Initial Public Offering?

• s-corporation

• sole proprietorship

• corporation

• limited partnership

Which of the following is an example of a service cooperative?

• Memphis Area Teachers Credit Union

• Sam's Club

• Farmers' Alliance

• Tennessee Valley Authority

A merger of corporations involved in different steps of manufacturing or marketing is known as a

• conglomerate

• multinational merger

• horizontal merger

• vertical merger

Which of the following economic systems is likely to have the smallest government?

• socialism

• free market capitalism

• communism

• modified free market