Econ Module 3 Exit Test Practice Questions

These government policies are aimed at improving market outcomes

• Regulatory policies

• Intended consequences

• Tax cuts

• Deficit spending

What businesses are relatively easy to form? Select all that apply (there are two correct answers)

• Sole proprietorships

• Partnerships

• Corporations

• Conglomerates

A government action that affects the production of a good or service

• Regulation

• Subsidy

• Law of supply

• Law of demand

What legal protects apply to inventors and creators? Select all that apply. There are two correct answers.

• Patents

• Copyrights

• Mergers

• Price fixing

• Collusion

The obstacles in creating a new firm of business

• Barriers to entry

• Regulation

• Antitrust laws

• Mergers

Read the following statement:

Buyers and sellers are informed about the market.

This statement means simply that consumers are aware of what the good should cost, and suppliers know what they should expect to receive for the items they produce. Since a perfect competition market is generally for a mass-produced good, suppliers have little influence on the market. If a single dairy farmer wanted to increase what they charged for milk, it would have a negligible effect on the overall market. It is also possible that the buyers would simply buy from a competing producer, rather than pay the higher prices.

When evaluating whether or not why suppliers have little influence on the market, what would buyers rather do than spend more money?

• buy from a competing producer

• sell to a non-competing producer

• sell to a non-competing seller

• buy from a non-competing producer

The two market structures that are most common in the U.S

• monopolistic competition & oligopoly

• oligopoly and monopoly

• perfect competition and oligopoly

In a market economy with perfect competition, sellers

• enter and exit the market freely

• control prices

• join with other sellers to influence prices

• have incomplete information about market conditions

Some examples of standardized products include

• agricultural products, such as milk and eggs

• clothing products

• electronics

• furniture

In a market economy with imperfect competition sellers

• sometimes join with other sellers to influence prices

• never have any control over price

• are always well-informed of market conditions

• offer only standardized products