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Paper 1 Revision quiz

Total questions: 61

Worksheet time: 58mins

Name
Class
Date
1.
In perfect competition, the product is differentiated
a)
True
b)
False
2.
In monopolistic competition there are many buyers and sellers
a)
True
b)
False
3.
In which market structure is there the LEAST competition?
a)
Monopoly
b)
Oligopoly
c)
Monopolistic Competition
d)
Perfect Competition
4.
In which market structure is there the MOST competition?
a)
Monopoly
b)
Oligopoly
c)
Monopolistic Competition
d)
Perfect Competition
5.
Which type of market structures has many many producers(companies) that sell identical products and has no control over price?
a)
perfect competition
b)
monopolistic competition
c)
oligopoly
d)
monopoly
6.
Which type of market structures has very few producers(companies) that control the majority of the market?
Hint: think of the soda market
a)
perfect competition
b)
monopolistic competition
c)
oligopoly
d)
monopoly
7.
The jeans industry would fall into what type of market structure? ( jeans are similar but there are some differences in the product)
a)
monopoly
b)
oligopoly
c)
perfect competition
d)
monopolistic competition
8.
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.
9.
This market structure has 3-4 firms who dominate 70-80% of the industry. 
a)
Monopoly
b)
Monopolistic Competitio
c)
Perfect Competitio
d)
Oligopoly 
10.
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
11.
When a major car company lowers its prices, other car makers will probably 
a)
maintain existing prices.
b)
raise their prices.
c)
go out of business.
d)
lower their prices.
12.
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.
13-27.
13.

What is the main characteristic of a monopoly?

a)

Low differentiation and many competitors

b)

Low differentiation and one competitor

c)

High differentiation and one competitor

d)

High differentiation and many competitors

14.

What is the main characteristic of perfect competition?

a)

High differentiation and many competitors

b)

Low differentiation and many competitors

c)

High differentiation and one competitor

d)

Low differentiation and one competitor

15.

What is the term for a market with a few sellers and some differentiation in products?

a)

Perfect competition

b)

Monopolistic competition

c)

Monopoly

d)

Oligopoly

16.

Which market structure has a single seller with low differentiation in products?

a)

Monopoly

b)

Monopolistic competition

c)

Oligopoly

d)

Perfect competition

17.

In which market structure can the seller set the price and quantity?

a)

Oligopoly

b)

Monopoly

c)

Perfect competition

d)

Monopolistic competition

18.

What is the term for a market with many competitors and high differentiation in products?

a)

Oligopoly

b)

Monopoly

c)

Perfect competition

d)

Monopolistic competition

19.

Which industry is an example of perfect competition?

a)

Unbranded PCs

b)

Branded computers

c)

Screw manufacturers

d)

Fine dining

20.

Which industry is an example of an oligopoly?

a)

Unbranded PCs

b)

Screw manufacturers

c)

Branded computers

d)

Fine dining

21.

Which industry is an example of monopolistic competition?

a)

Fine dining

b)

Branded computers

c)

Unbranded PCs

d)

Screw manufacturers

22.

Which industry is an example of a monopoly?

a)

Fine dining

b)

Branded computers

c)

Unbranded PCs

d)

Screw manufacturers

23.

What is the term for a market with a few sellers and low differentiation in products?

a)

Oligopoly

b)

Monopoly

c)

Perfect competition

d)

Monopolistic competition

24.

Which market structure is characterized by fierce competition among a few providers?

a)

Monopolistic competition

b)

Monopoly

c)

Perfect competition

d)

Oligopoly

25.

Which market structure is characterized by a few providers who can coordinate with each other?

a)

Oligopoly

b)

Perfect competition

c)

Monopolistic competition

d)

Monopoly

26.

Which market structure is characterized by highly differentiated products but many competitors?

a)

Oligopoly

b)

Monopolistic competition

c)

Monopoly

d)

Perfect competition

27.

Which market structure is characterized by a single provider with highly differentiated products?

a)

Perfect competition

b)

Monopoly

c)

Monopolistic competition

d)

Oligopoly

28.

A) This firm is productive efficient from firm's POV.

B) This firm is also productive efficient from society's POV.

a)

A) True

B) True

b)

A) True

B) False

c)

A) False

B) True

d)

A) False

B) True

29.

In order for a firm to achieve allocative efficiency, this firm must produce at a point where

Price = Marginal Cost as value of benefit that consumers placed on the last unit of good is equal to the additional cost incurred to produce the same last unit of good

a)

True

b)

False

30.
What is productive efficiency?
a)
When resources are used in a way that achieves the maximum quantity of output from a given quantity of productive resources.
b)
When resources are used in a way that achieves the minimum quantity of output from a given quantity of productive resources.
c)
When resources are used in a way that achieves the average quantity of output from a given quantity of productive resources.
d)
When resources are used in a way that achieves no output from a given quantity of productive resources.
31.
At what point does the Marginal Cost (MC) intersect with the Average Cost (AC)?
a)
At the highest point of the AC
b)
At the lowest point of the AC
c)
At the midpoint of the AC
d)
At the starting point of the AC
32.
When is a firm considered productively efficient?
a)
When AC is greater than MC
b)
When AC is less than MC
c)
When AC equals MC
d)
When AC is not related to MC
33.
What is allocative efficiency?
a)
When resources go to the production of goods and services that people most want and provide greatest consumer satisfaction.
b)
When resources are equally distributed among all sectors.
c)
When the government controls the production of goods and services.
d)
When there is no production of goods and services.
34.

Fill in the blank. Economies of scale is when as output _________, unit costs ________ in the long run.

a)

increases; decrease

b)

increases; increase

c)

decreases; increase

d)

decreases; decrease

35.

Internal economies of scale are those that

a)

Result from changes in production techniques

b)

Increase due to the growth of the industry as a whole

c)

Generate lower per unit production costs

d)

Reduce production costs in the short run

36.

Larger firms are better able to diversify into a range of product areas or markets and thus lessen their risk. This is an example of

a)

Financial economies of scale

b)

Technical economies of scale

c)

Managerial economies of scale

d)

Marketing economies of scale

e)

Risk bearing economies of scale

37.

Large firms can buy raw materials in bulk at more favourable rates. This is an example of

a)

Purchasing economies of scale

b)

Technical economies of scale

c)

Managerial economies of scale

d)

Marketing economies of scale

e)

Risk bearing economies of scale

38.

An increase in the level of qualifications required to teach at secondary school is likely to

a)

Increase elasticity of demand for labour

b)

Increase elasticity of supply for labour

c)

Decrease elasticity of demand for labour

d)

Decrease elasticity of supply for labour

39.

A minimum wage that is set above the equilibrium wage rate is likely to result in...

a)

Labour shortages

b)

Surplus labour (unemployment)

40.
a)

Monopsony

b)

Perfect Competition

c)

Oligopsony

d)

All of the above

41.

what is a trade union?

a)

(a) It is an organisation

b)

(b) A group of workers

c)

(c) Trade unions are independent organisations that represent workers to their employers

d)

(d) To register a trade union, you must apply to the Registrar of labour Relations

42.

It refers to a mass refusal of workers to perform job due to dispute

a)

Lockout

b)

Picket

c)

Arbitration

d)

Strike

43.

What is an example of a cognitive bias in decision making according to behavioural economics?

a)

Anchoring

b)

Maximizing profits

c)

Diminishing marginal returns

d)

Ranking the order of different outcomes

44.

According to neo-classical economics, what is the 'rational choice theory'?

a)

People always make decisions that provide the greatest benefit

b)

People are influenced by cognitive biases

c)

People make decisions based on emotions

d)

People always make irrational choices

45.

What is the 'availability heuristic' in decision making according to behavioural economics?

a)

People make judgments about the probability of events by how easy it is to think of examples

b)

People always make rational decisions

c)

People are influenced by the default option

d)

People are not affected by losses or gains

46.

An electricity company charging a higher price for the first 100 units used per month and lower price for all other electricity consumed on top of the 100 units is a form of...

a)

First degree price discrimination

b)

Second degree price discrimination

c)

Third degree price discrimination

47.

Spotify is available to students at a lower cost. This is a form of...

a)

First degree price discrimination

b)

Second degree price discrimination

c)

Third degree price discrimination

48.

Universities are engaging in price discrimination when they charge different levels of tuition to poor and wealth students

a)

True

b)

False

49.

Price discrimination is not possible under

a)

Perfect competition

b)

Monopoly

c)

Oligopoly

d)

Monopolistic Competition

50.

Price discrimination is defined as a business charging different consumers ... prices for the ... product, whereby the price difference is not due to the differences in the cost of supplying the customers.

a)

different …same

b)

same …same

c)

same...different

d)

different …different

51.

Conditions for Price Discrimination

a)

ability to identify and segment the market into separate groups

b)

have an PED that is price inelastic

52.
Firms' ability to prevent re-sale (arbitrage)
a)
Essential condition for price discrimination
b)
Non-essential condition for price discrimination
53.
A firm with market power engages in price discrimination to:
a)
earn a higher profit
b)
increase consumer surplus
c)
decrease deadweight loss
d)
make its demand more elastic 
54.

A grocery store that offers one can of soup for $0.35 and three cans for $1.00 is engaging in

a)

1st degree

b)

2nd degree

c)

3rd degree

55.

Reducing fares for bus travel for over 60's is a form of price discrimination.

a)

First degree price discrimination

b)

Second degree price discrimination

c)

Third degree price discrimination

56.

What is an externality in the context of market failure?

a)

A product that can be excluded from non-payers

b)

A cost or benefit incurred by a third party who did not agree to it

c)

The exclusive right to produce a particular good

d)


A situation where market supply and demand balance perfectly

57.

What characterises a Public good?

a)


It is non-excludable and non-rivalrous

b)


It is excludable and rivalrous

c)


It is only available to paying customers

d)


It can be easily depleted

58.

Which of the following is an example of a public good?

a)


A private swimming pool

b)


A toll road

c)


National defence

d)


A restaurant meal

59.

What is information asymmetry?

a)


When all market participants have the same information

b)


When one party in a transaction has more or better information than the other

c)


The equal distribution of income among participants

d)


The symmetry in product information available to all consumers

60.

Which of the following is a solution to reduce negative externalities?

a)


Decreasing taxes on the affected goods

b)


Increasing public awareness

c)


Imposing a tax on the producer of the externality

d)

Encouraging monopolies

61.

The free-rider problem is most associated with:

a)


Private goods

b)


Public goods

c)


Negative externalities

d)


Information asymmetry

62.

Which of the following is a characteristic of a monopolistic market?

a)


Many sellers and many buyers

b)


A single seller and many buyers

c)


Many sellers and a single buyer

d)


Perfect information symmetry

63.

Which of the following is a regulatory measure to control monopolistic power?

a)


Encouraging the formation of cartels

b)


Price capping

c)


Reducing taxes on monopoly profits

d)


Decreasing barriers to entry

64.

Which of the following is not a public good?

a)

Street Lights

b)

The Army

c)

Buses

d)

Flood Control Systems

65.

Which of the following defines a Quasi-Public Good?

a)

Semi Non Rival & Semi Non Excludable

b)

Non Rival & Non Excludable

c)

Non Excludable & Semi Non Rival

d)

Semi Non Excludable & Non Rival

66.

Public goods cause market failure because of ?

(a)  

67.

Public goods are non-rival and non- ?

(a)  

68.

What are some potential impacts of privatisation on the economy?

a)

Increased efficiency, decreased service quality, job losses, and equality

b)

Decreased efficiency, improved service quality, job creation, and equality

c)

Increased bureaucracy, decreased service quality, job creation, and equality

d)

Increased efficiency, improved service quality, job losses, and inequality

69.

What is the role of the government in privatisation?

a)

Deciding which state-owned assets to sell, setting the terms of the sale, and regulating the process

b)

Running the state-owned assets as private businesses

c)

Providing subsidies to state-owned companies

d)

Allowing foreign governments to control the privatisation process

70.

What is the meaning of consumer surplus?

a)

The price consumers are willing to pay for a product

b)

The value gained by producers from selling a product above the cost of production

c)

The cost of producing units for consumers

d)

The value gained by consumers from consuming a product above the price paid

71.

At what point does consumer surplus disappear in the diagram?

a)

When price and quantity are equal

b)

When price is higher than the value gained by consumers

c)

When quantity is higher than the value gained by consumers

d)

When price is lower than the value gained by consumers

72.

Some of the original consumer and producer surplus is lost to government tax revenue. What areas are still not accounted for in the graph? (Mark all that are correct.)

a)

B

b)

C

c)

D

d)

E

73.

What area of the graph shows Deadweight Loss? (Mark all that are correct.)

a)

B

b)

C

c)

D

d)

E

74.

Identify all the areas that represent the change in producer surplus after the tax. (Mark all that are correct.)

a)

B

b)

C

c)

D

d)

E

e)

F

75.

Inequality means not everyone gets treated the same or has the same access to opportunities.

a)

True

b)

False

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