Market Structures and Microeconomics Quiz

What is a characteristic of perfect competition?

• Few sellers dominate the market

• Products are differentiated

• Many buyers and sellers

• High barriers to entry

In a monopoly, how many sellers are present in the market?

• Three sellers

• Two sellers

• One seller

• Many sellers

What is a key feature of oligopoly?

• Identical products

• Few sellers

• Many buyers and sellers

• Perfect information

What does 'price maker' refer to in a monopoly?

• Firms cannot influence prices

• The monopolist sets the price

• Prices are determined by market forces

• All firms are price takers

What is a defining characteristic of monopolistic competition?

• Differentiated products

• One seller

• High barriers to entry

• Identical products

What is the purpose of taxes in government intervention?

• To encourage free entry

• To increase market competition

• To eliminate monopolies

• To raise government revenue

What does opportunity cost represent?

• The total cost of production

• The value of the next best alternative

• The cost of resources used

• The price of goods sold

What is a feature of perfect information?

• Buyers and sellers have limited knowledge

• Only sellers know the prices

• Both buyers and sellers have full knowledge

• Prices are hidden from consumers

What is a consequence of monopolies?

• Higher prices than marginal cost

• Allocative efficiency

• Increased competition

• Lower barriers to entry

What is the main focus of microeconomics?

• National economic policies

• Behavior of individual economic units

• Global trade dynamics

• Government regulations