Prices and Market 6 & 7

A "Laissez faire" economy

• supports the interference of government in trade as much as possible.

• supports the interference of government in trade as little as possible.

• lets the government decide what an economy should produce.

• supports high taxes and government spending.

According to Adam Smith, the "____________" guides members of a society to trade in the most beneficial way.

• laissez faire

• economic policy

• invisible hand

• self-interest

A(n) _________ may start a price war in order to get a larger share of the market.

• perfect competitor

• monopolist

• oligopolistic

• economist

A monopoly based on ownership or control of a manufaturing method is a _________ monopoly.

• natural

• technological

• geographic

• government

Market structure that has all the conditions of perfect competition except for identical products is a(n)

• oligopoly

• monopoly

• monopolistic competition

• perfect competition

When sizable deviations from one or more of the conditions required for perfect competition take place, _________ occur.

• profits

• market failures

• market successes

• oligopolistic competitions

When the factors of production do not move to markets where returns are highest, the economy faces the problem of

• resource immobility

• resource allocation

• externalities

• rationing

The price system can absorb shocks such as war and natural disasters because the system is _________.

• neutral

• flexible

• rigid

• cheap to administer

The ___________ Act sought to do away with restraints and monopolies that hindered competition or made competition impossible.

• Sherman Antitrust

• Federal Trade Commission

• Clayton Antitrust

• Kears-Webb

In the case of a(n) _________, it makes sense to let the firm expand to take advantage of lower production costs, and then regulate its' activities so that it cannot take advantage of the consumer.

• natural monopoly

• oligopoly

• perfect competitor

• geographic monopoly