Unit 8 Test Review

In the circular flow model where do exchanges of goods and services take place?

• Business Sector

• Consumer Sector

• Factor Market

• Product Market

Two main participants in the circular flow of economic activity?

• Businesses and the government

• Consumers and the government

• Government and foreign input

• People and businesses

People sell their labor in the circular flow?

• Business Sector

• Consumer Sector

• Factor Market

• Product Market

Rouses has apples on sale for $0.99 per lb. Carters across town from Rouses after hearing about the sale lowered their prices on apples. Carters went from $1.29 per pound to $0.88 a pound. This is an example of:

• Competition

• Economic Freedom

• The Profit Motive

• Voluntary Exchange

Monopolistic competition?

• One company sells identical products under different names.

• Many companies sell their similar but not identical products.

• Very few companies selling identical products

• One company selling several different products under different names.

In a perfectly competitive market how much control over price do companies have?

• None

• Very Little

• Some

• Total Control

Satsuma has three large supermarkets that supply most of the groceries for the Island's population. A gas station also sells a very small selection of groceries. How would you describe the market for groceries in Satsuma?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

Company that serves an entire state is an example of:

• Fiscal policy

• A merger

• A natural monopoly

• Perfect competition

Why do many governments control or outlaw monopolies?

• Monopolies are always run by selfish people who defraud customers

• Monopolies often become more powerful than governments

• Monopolies can make excessive profits by overcharging consumers

• Monopolies are too competitive and sell their goods and services for extremely low prices

Act that bans monopolies in the U.S.?

• Americans with Disabilities Act

• Civil Rights Act

• Equal Pay Act

• Sherman Antitrust Act