Chapter 7 Quiz

A plant in a small town closes, leaving hundreds of people unemployed. There are jobs available at a similar plant in another state, but many of the unemployed workers are unwilling to move or cannot afford to move. An economist might use this example to ______.​

• ​describe what happens when there is not enough competition

• ​define resource immobility

• ​define a public good

• ​explain an externality

By promoting transparency, the government can improve _____​

• ​market efficiency.

• ​economies of scale.

• ​profit margins.

• ​zoning.

Which would an economist say best describes a “trust”?​

• ​a feeling in a market

• ​a public good

• ​an illegal combination

• ​a federal order

​What condition differentiates a market of pure competition from one of monopolistic competition?

• ​price

• ​competition

• ​products

• ​firms

​The market structure called perfect competition is best described as ____

• ​theoretical.

• ​commonplace.

• small

• ​natural.

​Which of the following can cause market failure?

• ​too much mobility

• ​too much competition

• ​not enough information

• ​too much information

​What level of government is most closely associated with zoning?

• ​federal

• ​interstate

• state

• ​local

​Which of the following do economists use to classify markets?

• ​number of firms

• ​size of firms

• ​type of product

• ​all answers are correct

​Which of the following is a benefit for monopolies?

• ​economies of scale

• ​the Federal Trade Commission Act

• ​cease and desist order

• foreclosure

​Which statement is most accurate?

• ​Markets can sometimes fail.

• ​Markets can theoretically fail, but not in reality.

• ​Market failure is a myth.

• ​Market failure is an unproven hypothesis.