Economics Market Quiz

Which market type has many buyers and sellers, homogeneous products, and no barriers to entry or exit? A) Monopoly B) Oligopoly C) Perfect Competition D) Monopolistic Competition

• D) Monopolistic Competition has differentiated products

• C) Perfect Competition

• A) Monopoly has few sellers and barriers to entry

• B) Oligopoly has a few dominant firms

What happens to price and quantity when demand increases and supply remains constant? A) Price increases, quantity decreases B) Price decreases, quantity increases C) Price and quantity both increase D) Price and quantity both decrease

• C) Price and quantity both increase

• A) Price increases, quantity decreases

• B) Price decreases, quantity increases

• D) Price and quantity both decrease

At market equilibrium, what is true about the quantity supplied and quantity demanded? A) Quantity supplied is greater than quantity demanded B) Quantity demanded is greater than quantity supplied C) Quantity supplied equals quantity demanded D) Quantity supplied and quantity demanded are unrelated

• D) Quantity supplied and quantity demanded are inversely related

• C) Quantity supplied equals quantity demanded

• A) Quantity demanded is less than quantity supplied

• B) Quantity supplied is less than quantity demanded

If a small change in price leads to a large change in quantity demanded, what type of price elasticity is being exhibited? A) Perfectly Inelastic B) Inelastic C) Unitary Elastic D) Elastic

• Inelastic

• Unitary Elastic

• D) Elastic

• Perfectly Inelastic

Which market structure is characterized by a single seller with high barriers to entry and unique products? A) Perfect Competition B) Oligopoly C) Monopoly D) Monopolistic Competition

• C) Monopoly

• D) Monopolistic Monopoly

• B) Duopoly

• A) Perfect Monopoly

When the government imposes a price ceiling below the equilibrium price, what is the likely outcome? A) Surplus of goods B) Shortage of goods C) No impact on the market D) Increase in equilibrium price

• C) Decrease in equilibrium price

• A) Excess of goods

• D) No change in market equilibrium

• B) Shortage of goods

In a perfectly competitive market, what happens if a firm tries to charge a price above the market price? A) Consumers will buy more from that firm B) Consumers will buy less from that firm C) Consumers will buy the same amount from that firm D) The firm will go out of business

• B) Consumers will buy less from that firm

• D) The firm will increase its profits

• C) Consumers will buy the same amount from that firm

• A) Consumers will buy more from that firm

What is the main goal of antitrust laws in the context of market structures? A) To promote monopolies B) To prevent unfair business practices C) To increase barriers to entry D) To reduce consumer choices

• D) To reduce consumer choices

• B) To prevent unfair business practices

• A) To promote monopolies

• C) To increase barriers to entry

Which of the following is an example of a barrier to entry in a market? A) Low production costs B) Government subsidies C) Brand loyalty D) High demand for the product

• A) High production costs

• B) Lack of government regulations

• D) Low demand for the product

• C) Brand loyalty

If the price elasticity of demand for a good is -0.5, how would you describe the demand for that good? A) Perfectly Inelastic B) Inelastic C) Unitary Elastic D) Elastic

• B) Inelastic

• C) Unitary Elastic

• D) Elastic

• A) Perfectly Inelastic