Market Structures

It is the most ideal market structure.

• perfect competition

• monopolistic competition

• oligopoly

• monopoly

This market structure is characterized by the lowest level of competition among producers.

• monopolistic competition

• monopoly

• oligopoly

• perfect competition

It is a group of suppliers whose purpose is to maintain prices at a high level, and to restrict competition in the market.

• oligopoly

• oligopsony

• cartel

• collusion

All of the following are characteristics of monopolistic competition except ___.

• There are many buyers and many sellers.

• The products sold are similar but differentiated.

• A market leader may emerge from among the many suppliers.

• There are many barriers to entry and exit.

Market failure refers to the ____ due to imperfections in the market mechanism.

• prevalence of negative externalities

• disequilibrium in the market

• inefficient allocation of resources

• low level of positive externalities

Which of the following is NOT a merit good?

• energy drinks

• education

• public libraries

• health services

What is a demerit good?

• A good or service that can bring about a positive or negative externality

• A good or service that has a negative impact on the user, and a third party

• A good or service that is prohibited or regulated by the government

• A good or service that as a negative impact on the economy

Which of the following can be done by the government to discourage the use of demerit goods?

• impose a higher tax on these goods

• Set a minimum age for the consumption of these goods

• Inform the people about the negative effects of consuming these good

• Impose a total ban on the production & consumption of these goods

What does "positive externality" mean?

• It is the cost that is involved in the production & consumption of a good or service.

• It is the benefit enjoyed by a third party from the consumption of a good or service.

• It is the benefit that a person derives from consuming a certain good or service.

• It is the benefit that merit goods bring.

Which of the following is NOT true?

• Competition is good for both buyers and sellers.

• The setting of the price & quantity of goods sold is affected by the market structure that is in place.

• The government intervenes in the market to prevent huge profits for businesses.

• Lack of competition in business can lead to an inefficient allocation of resources.