Market Structures and Business Organizations Test

A price ceiling is:

• The lowest price a good can be sold for

• The highest price a good can be sold for

• A minimum wage law

• A government subsidy

A price floor often leads to:

• Shortages

• Surpluses

• Equilibrium

• Increased consumer demand

Rent control is an example of a:

• Price floor

• Price ceiling

• Free market policy

• Market failure

When a price ceiling is set below the equilibrium price, the result is usually:

• A) A surplus

• B) A shortage

• C) No change in the market

• D) A decrease in government spending

Minimum wage laws are an example of a:

• Price ceiling

• Price floor

• Market failure

Which market structure is characterized by a single seller?

• Perfect competition

• Oligopoly

• Monopoly

• Monopolistic competition

A monopolistic competition market structure is one where:

• Many firms sell identical products

• A few firms dominate the industry

• Many firms sell similar but not identical products

• There is only one producer

A key characteristic of an oligopoly is:

• Free entry and exit of firms

• A large number of small firms

• Firms that are interdependent

• No barriers to entry

In perfect competition, firms are:

• Price makers

• Price takers

• Limited by government regulation

• Always operating at a loss

The fast-food industry is an example of:

• Perfect competition

• Oligopoly