Ch 7 Market Structures Test

In a market economy with perfect competition sellers:

• a. control prices

• b. enter and exit the market

• c. join with other sellers to influence prices

• d. have incomplete information about market conditions

1. 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

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

A market structure where only one seller sells a product for which there are no close substitutes is called

• a. cartel

• b. monopoly

• c. oligopoly

• d. trust

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

A monopoly in which the costs of production are lowest when only one firm provides output is called a

• a. geographic monopoly

• b. government monopoly

• c. natural monopoly

• d. technological monopoly

A monopoly that exists because a firm controls an invention is called a

• a. geographic monopoly

• b. government monopoly

• c. natural monopoly

• d. technological monopoly

A situation in which the average cost of production falls as the producer grows larger is called

• a. barrier to entry

• economics of scale

• c. predatory pricing

• d. public disclosure

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

With monopolistic competition there are

• a. few sellers and a few buyers

• b. few buyers but many sellers

• c. many buyers but few sellers

• d. many buyers and many sellers