Unit 4 Economics Test Practice

A market with a large number of firms all producing essentially the same product

• martket structures

• pure competition

• commodity

• imperfect competition

A product that is considered the same regardless of who makes it or sells it

• pure competiton

• goods

• commodity

• services

Factors that make it difficult for new firms to enter a market

• imperfection competition

• barriers to entry

• commodity

• start up costs

A market structure that fails to meet the conditions of pure competition

• start up costs

• commodity

• imperfect competition

• goods

The expenses that a new business must pay before it can begin to produce and sell are called

• imperfect competition

• perfect competition

• start up costs

• commodity

Complex technology is a common example of start up costs. True of false?

• True

• False

In perfect competition markets, both prices and production costs are kept low. True or false?

• True

• False

This forms when barriers to entry prevent firms from entering a market that has a single supplier.

• Oligopoly

• natural monopoly

• monopoly

• government monopoly

a state of limited competition, in which a market is shared by a small number of producers or sellers

• monopoly

• pure competition

• oligopoly

• natural monopoly

Under oligopoly, firms may engage in collusion, or an agreement to illegally set prices and production levels.

• True

• False