WorksheetsProduct markets, supply and demand:)
Total questions: 41
Worksheet time: 3hrs 10mins
What kind of market runs most efficiently when one large firm supplies all of the output?
a natural monopoly
a network
perfect competition
oligoply
Which of the following is NOT a condition for perfect competition?
Many buyers and sellers participate in the market.
Sellers offer a wide variety of products.
Buyers and sellers are well informed about products.
Sellers are able to enter and exit the market freely.
Which of the following market structures is known as a price taker, not a price maker?
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly
How is monopolistic competition mainly different from perfect competition?
The government sets prices.
There are fewer sellers and more buyers.
Buyers can buy from any seller.
Sellers can profit from product differentiation.
In imperfectly competitive markets,
firms will produce at a higher quantity and a lower price than in perfect competition.
sellers always make a profit.
firms will produce a lower quantity and charge a higher price than they would in perfect competition.
firms always operate in the downward sloping portion of their ATC curve.
The order of product markets in the table above would be,
perfect competition, oligopoly, monopolistic competition and monopoly
perfect competition, monopolistic competition , oligopoly and monopoly
monopolistic competition, perfect competition, ,, monopoly and oligopoly
oligopoly, perfect competition, , monopolistic competition and monopoly
The marginal cost curve typically does which of the following?
Increases at a fixed rate.
Decreases and eventually increases.
Decreases at a decreasing rate.
Increases and eventually decreases.
A price ceiling causes which of the following
A shortage due to excess demand
A shortage due to excess supply.
A surplus due to excess demand.
A surplus due to excess supply.
Which of the following could experience "the tragedy of the commons?"
cable t.v.
national defense
restaurant meals
fish in the ocean
The area of consumer surplus is found.
Below the demand curve and above the supply curve before market equilibrium quantity.
Above the demand curve and below the supply curve after market equilibrium quantity.
Below the demand curve and above equilibrium price before equilibrium quantity.
Above the supply curve and below equilibrium price before market equilibrium.
Trying to satisfy unlimited wants with limited resources defines _____ and is the fundamental problem of economics.
scarcity
needs
wants
microeconomics
products related in such a way that an increase in the price of one increases the demand for the other (replace with cheaper option)
change in demand
complements
substitutes
income effect
Movement along the demand curve showing that a different quantity is purchased in response to a change in price
change in demand
complements
substitutes
change in quanity demanded
Cost of using one more unit of a good or service
marginal cost
Marginal benefit
Trade off
Want
The total cost of production is determined by?
adding fixed and variable costs
adding marginal product changes as variable inputs are added.
the way inputs change in response to business decisions.
the way output changes independent of input.
Profits will be maximized when marginal revenue
is double marginal cost.
equals marginal cost
is one-half marginal cost
exceeds marginal cost.
A company decreases the price of a gallon of milk by 10% and the company's total revenues fall significantly. What term best describes the demand for milk?
elastic
inelastic
unit elastic
demand elastic
Describes demand when a given change in price causes a relatively smaller change in quantity demanded
inelastic
marginal utility
direct pricing
market demand
Advertising, fashion trends, and new product introductions serve to
create consumer needs
create consumer demand/change in demand
increase income effectiveness
minimize the income effect
Hundreds of firms sell slightly similar products would best fit what type of market structure?
Perfect Competition
Monopolistic Competition
Monopoly
Oligopoly
Thousands of firms that produce identical products, to an economist, would be competing in this type of market stucture.
Perfect Competition
Monopolistic Competition
Monopoly
Oligopoly
When only a few firms dominate the market, the firms would be considered part of this market structure?
Monopolistic Competition
Monopoly
Perfect Competition
Oligopoly
The graph illustrates a ...
Demand Curve
Supply Curve
Elasticity Curve
Price Ceiling
Land, labor, capital, and entrepreneurs are the
results of supply and demand.
result of production.
basis of employment.
factors of production.
Only one seller sells a product for which there are no close substitutes
Monopoly
Oligopoly
Monopolistic competition
Perfect competition
Exists when many sellers offer similar, but not standardized products
Monopoly
Oligopoly
Monopolistic Competition
Perfect Competition
The least competitive market structure
Monopoly
Oligopoly
Monopolistic competition
Perfect competition
Formal organization of sellers that agree to act together to set prices and limit output
Monopoly
Price maker
Oligopoly
Cartel
Exists when there are economies of scale
Natural monopoly
Government monopoly
Technological monopoly
Geographic monopoly
Postal service
Natural monopoly
Government monopoly
Technological monopoly
Geographic monopoly
Which is NOT a characteristic of monopolistic competition?
Few sellers and many buyers
Similar but differentiated products
Limited control of prices
Freedom to enter/exit market
When businesses set prices below cost for a time for the sole purpose of putting their competitors out of business
Price fixing
Market allocation
Predatory pricing
Perfect competition
Monopolists are able to control prices because they have
much competition and many substitutes
much competition and no substitutes
no competition and many substitutes
no competition and no substitutes
Which is NOT a characteristic of a monopoly?
Seller sets the market price
Entry into the market is easy
Firm sells a unique product
One seller
The town of Utopia has three gas stations. The owners of these gas stations make decisions together about when to raise and lower gas prices. It would be difficult for another gas station to enter this market. Which market structure best describes the market for gas in Utopia?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
If a major car company such as Ford lowers their prices, what are other car companies likely to do?
Raise their prices
Go out of business
Maintain their current prices
Lower their prices
There are many sellers of blue jeans. Each blue jean seller makes their product slightly different to set it apart from others. There is free entry and exit into the blue jean market. Which market structure does this describe?
Perfect Competition
Oligopoly
Monopoly
Monopolistic Competition
Economic costs differ from accounting costs in which of the following ways?
Economic costs are implicit only.
Accounting costs are implicit only.
Economic costs are both the explicit and implicit costs of production
Accounting costs are both the explicit and implicit costs of production
The Law of Demand states that a/an ______________ relationship exists between price and quantity demanded.
direct
positive
inverse
simple
