WorksheetsPrinciples of Economics (TEST 2- MCQ)
Total questions: 20
Worksheet time: 16mins
Name
Class
Date
1.
Which of the following is NOT a Market Structure?
a)
Perfect Competition
b)
Oligopoly
c)
Monopoly
d)
Corporation
2.
Markets like automobiles, cell phones, cable TV, and internet providers are examples of which market structure?
a)
Monopoly
b)
Oligopoly
c)
Perfect competition
d)
Monopolistic competition
3.
Which is NOT a characteristic of a monopoly?
a)
Seller sets the market price
b)
Entry into the market is easy
c)
Firm sells a unique product
d)
One seller
4.
Perfect competition involves:
a)
Sellers working together to set prices
b)
A large number of buyers & sellers
c)
Difficulty entering & exiting the market
d)
Little information is available to buyers
5.
The market for milk is an example of perfect competition. Why?
a)
Sellers offer a nearly identical product
b)
Anyone can start a dairy farm or leave the dairy business at any time
c)
Many people buy and sell milk
d)
All of the above
6.
List the four market structures in order from least competitive to most competitive.
a)
Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition
b)
Perfect Competition, Oligopoly, Monopoly, Monopolistic Competition
c)
Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition
d)
Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly
7.
If a major car company such as Ford lowers their prices, what are other car companies likely to do?
a)
Raise their prices
b)
Go out of business
c)
Maintain their current prices
d)
Lower their prices
8.
What are the advantages of economies of scale?
a)
Costs less per unit to produce an item
b)
Reduces barriers to entry in the market and increases competition
c)
Better quality products are produced
9.
How many firms are there in a perfect competition?
a)
1
b)
2-5
c)
Many
10.
Factors that make it difficult for new firms to enter a market are called
a)
Barriers to entry
b)
Factors of production
c)
Limited supply
d)
Monopolistic Outlook
11.
How many firms are there in a monopoly?
a)
1
b)
2-5
c)
Many
12.
An industry that is dominated by a few large firms is
a)
monopolistic competition.
b)
a monopoly.
c)
perfect competition.
d)
an oligopoly.
13.
Choose the example that goes best with an oligopoly.
a)
apples
b)
cell phone providers
c)
utilities
d)
clothing
14.
Which is NOT a characteristic of perfect competition?
a)
difficult entry into the market
b)
many sellers
c)
identical product
d)
no control over price
15.
Which is NOT a characteristic of a monopoly?
a)
Seller sets the market price
b)
Entry into the market is easy
c)
Firm sells a unique product
d)
One seller
16.
Perfect competition is characterized by
a)
a large number of sellers and buyers.
b)
diverse products.
c)
sellers acting together to set prices.
d)
uninformed buyers and sellers.
17.
Which market has no competition?
a)
perfect competition
b)
oligopoly
c)
monopoly
d)
monopolistic competition
18.
Which scenario is an example of a monopoly?
a)
A local water company is the sole provider of water for a small town.
b)
A dry cleaner specializes in environmentally friendly cleaning methods.
c)
A farmer produces green beans for sale at a farmer's market.
d)
A small number of cereal companies produce most of the cereal on the market.
19.
Actions of one firm will affect other firms
a)
True
b)
False
20.
A barrier to entry is
a)
an economic term for economies of scale
b)
illegal in most markets
c)
anything that prevents new firms from entering the market
d)
a factor that increases competition
100 %
