ECON - Unit 2 Practice Test

A one-firm industry is known as:

• monopolistic competition.

• oligopoly.

• monopoly.

• perfect competition.

An industry comprised of four firms, each with about 25 percent of the total market for a product is an example of:

• monopolistic competition

• oligopoly

• pure monopoly

• pure competition

Liability is the

• necessity to do a lot of paper work.

• requirement to offer fringe benefits.

• legal obligation to pay debts.

• opportunity of the sole proprietor to keep all profits after taxes.

An example of a barrier to entry is:

• high start–up costs.

• low start–up costs.

• differentiated products.

• government deregulation.

Which of the following is a product that might be offered in a perfectly competitive market?

• corn

• cell phone service

• electricity

• chicken sandwiches

Advertisements and giveaways are examples of _______________________.

• collusion

• non-price competition

• price-fixing

• price leadership

Most large businesses are

• sole proprietorships.

• general partnerships.

• corporations.

• cooperatives.

Stocks are:

• promises to repay a loan.

• also known as bonds.

• issued by sole proprietorships.

• shares of ownership of a corporation.

A dividend is a portion of a company’s profit paid out to

• the government for taxes

• shareholders of the company

• each partner of the business

• the sole proprietor

Every vehicle being driven on public roads is required to have:

• comprehensive coverage

• accident coverage

• collision coverage

• liability coverage