Economics Topic 4 Lessons 1 & 2 Quiz

Which 2 below are barriers to entry?

• complex technology

• overseas employees

• high start-up costs

• governement agencies

Pure competition is also called (a)   competition.

Which of the below are characteristics of perfect competition?

• similar products

• many buyers and sellers

• easy entry and exit

• uniformed buyers and sellers

In pure competition, how does one competitor gain market share over the other competitors?

• In pure competition, there is only one provider of each product.

• Cut the price of the products.

• In pure competition, all competitors are relatively equal.

• Offer extra features or bonuses with the products.

Which is the best example of a regional monopoly?

• fast food restaurant

• an airline

• a gas station

• a power/electric company

What controls exist to help discourage monopolies in the U.S. economy?

• Monopolies are completely illegal.

• Citizens can vote to dissolve a company that holds a monopoly.

• Government regulations.

• The free market encourages competition, and competition will limit monopolies.

Which of the following best defines a monopoly?

• A market where one individual owns companies through the entire distribution line, from raw materials to distribution of finished goods.

• A market where there are many well-informed buyers and sellers.

• A market where a single individual owns all of the companies in the market.

• A market where a single entity is large enough to set prices without impacting demand.

What is the biggest risk associated with monopolies?

• The entity with complete market share could increase prices as high as they wanted, since consumers would have nowhere else to go.

• They limit consumer choice, so they are discouraged.

• A company with a monopoly can pick their customers, even if they discriminate against someone based on their race, gender, or religion.

• Monopolies are typically owned and run by illegal groups like gangs and mobs, so they provide legal protection to criminal activities.

Markets that runs efficiently when 1 large business provides that service are called what?

• natural monopolies
• oligopoly

• pure competition

• none of these

The government can create monopolies by issuing patents, franchises and (a)   .