Chapter 7 - Market Structures

Which of the following do economists use to classify markets?

• number of firms
• size of firms
• type of product
• all of the above

The market structure called perfect competition is best described as ___

• theoretical.
• commonplace.
• small.
• natural.

What condition differentiates a market of pure competition from one of monopolistic competition?

• price
• competition
• products
• firms

If a shoe company pays a professional athlete to wear shoes it makes, it is an example of ___

• monopolistic competition
• product differentiation
• nonprice competition
• all of the above

Which market structure is defined by a single producer?

• pure competition
• monopolistic competition
• oligopoly
• monopoly

Which statement is most accurate?

• Markets can sometimes fail.
• Markets can theoretically fail, but not in reality.
• Market failure is a myth.
• Market failure is an unproven hypothesis.

Which of the following can cause market failure?

• too much mobility
• too much competition
• not enough information
• too much information

A plant in a small town closes, leaving hundreds of people unemployed. There are jobs available at a similar plant in another state, but many of the unemployed workers are unwilling to move or cannot afford to move. An economist might use this example to _______.

• describe what happens when there is not enough competition
• define resource immobility
• define a public good
• explain an externality

What happens when some of the costs or benefits associated with production and consumption fall on someone other than the producers or consumers of a product?

• Competition is reduced.
• There is a loss of resource mobility.
• The public good is reduced.
• There are unintended effects or spillovers.

What do externalities indicate?

• public goods
• a market failure
• a lack of information
• resource immobility