This quiz works best with JavaScript enabled. Home > Finance > Economics > Market Dynamics > Market Structures > Market Structures – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Structures Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of these is NOT an entry barrier created by government? A) Price discrimination. B) Franchise. C) Patents. D) License. Show Answer Correct Answer: A) Price discrimination. 2. An economic system in which economic decisions and the pricing of goods and services are guided by the interactions of a country's individual citizens and businesses. A) Market. B) Capital. C) Human Capital. D) None of above. Show Answer Correct Answer: A) Market. 3. Markets like automobiles, cell phones, cable TV, and internet providers are examples of which market structure? A) Oligopoly. B) Perfect competition. C) Monopoly. D) Monopolistic competition. Show Answer Correct Answer: A) Oligopoly. 4. What does marginal mean in the language of economics? A) Additional. B) Less. C) Satisfaction. D) I can't believe it's not Butter. Show Answer Correct Answer: A) Additional. 5. In this environment, companies sell different products and services, set their own individual prices, fight for market share, and are often protected by barriers to entry and exit. A) Oligopoly. B) Imperfect Competition. C) Capital. D) None of above. Show Answer Correct Answer: B) Imperfect Competition. 6. William, Elijah, and Sophia are discussing market structures in their economics class. They come across a market structure where a few large firms dominate the market. Which market structure are they talking about? A) Monopoly. B) Oligopoly. C) Monopsons. D) Perfect competition. Show Answer Correct Answer: B) Oligopoly. 7. The ease of entry and exit means A) Degree of product differentiation. B) Number of companies on the market. C) Ease of entry and exit from the market. D) None of above. Show Answer Correct Answer: C) Ease of entry and exit from the market. 8. A competitive market becomes a monopoly. What is likely to happen? A) There will be a transfer of surplus from consumer to producer. B) The loss in consumer surplus will be balanced by the increase in producer surplus. C) Consumer surplus will be reduced by the amount of the deadweight loss. D) Producer surplus will be reduced by the amount of the deadweight loss. Show Answer Correct Answer: A) There will be a transfer of surplus from consumer to producer. 9. What consist of differentiated products? A) No close substitutes. B) Many perfect substitutes. C) No substitutes of any kind. D) Close but not perfect substitutes. Show Answer Correct Answer: B) Many perfect substitutes. 10. What is the relationship between competitive behavior and competitive market structure? A) Competitive behavior has no impact on the competitive market structure. B) Competitive market structure is determined by government regulations. C) Competitive behavior and competitive market structure are unrelated. D) Competitive behavior is influenced by the competitive market structure. Show Answer Correct Answer: D) Competitive behavior is influenced by the competitive market structure. 11. A cable television company merges with a company that uses satellite dish technology to provide television service to consumers. A) Horizontal. B) Vertical. C) Conglomerate. D) None of above. Show Answer Correct Answer: A) Horizontal. 12. Public utilities (think FPL/City Water) are an example. A) Oligopoly. B) Perfect Competition. C) Monopolistic Competition. D) Natural Monopoly. Show Answer Correct Answer: D) Natural Monopoly. 13. Why do US markets dominated by oligopolies result in higher prices than markets with normal competition? A) The oligarchies are interdependent with each other. As a result, when one company lowers their price, the other companies will have to lower their prices to match. B) The companies of the oligarchy can collude (scheme together) to fix the prices at a unnaturally high rate compared to normal competition. C) Keeping up with the other companies of the oligarchy is expensive. To pay for these innovations, prices rise, and there isn't enough competition to lower it. D) One company controls the whole industry, so they can charge whatever unreasonably high price they want for their product. Show Answer Correct Answer: C) Keeping up with the other companies of the oligarchy is expensive. To pay for these innovations, prices rise, and there isn't enough competition to lower it. 14. Businesses and individuals decide what to produce and buy, and the market determines prices and quantities to be sold. The market will work out the price. A) Communism. B) Free-Market economy. C) Mixed Economy. D) Socialism. Show Answer Correct Answer: B) Free-Market economy. 15. If coffee and cream are complementary goods, an increase in the price for coffee will A) Increase the price of cream. B) Decrease the demand for cream. C) Have no effect of the price of cream. D) Have no effect on the demand for cream. Show Answer Correct Answer: B) Decrease the demand for cream. 16. When Gillette Co. unveiled Mach3, the world's first triple-blade razor, it took a bold gamble ..... Mach3 cartridges were to sell for around $ 1.60 each. Skeptics predicted the personal-care giant would soon be forced to cut that price. But the price is holding and Mach3 has become the No. 1 blade and razor. What's the secret to pricing power? For starters, a commitment to innovation. Gillette spent nearly $ 1 billion on the development and initial marketing of Mach3. Source:Business Week, February 1, 1999 Based on the passage, what type of monopoly is helping Gillette Co. maintain a high price for its Mach3 razor? A) Geographic monopoly. B) Government monopoly. C) Natural monopoly. D) Technological monopoly. Show Answer Correct Answer: D) Technological monopoly. 17. Laws that define monopolies and give government the power to control them and break them up A) Regulation. B) Antitrust legislation. C) Market allocation. D) Deregulation. Show Answer Correct Answer: B) Antitrust legislation. 18. Which of the following best describes what will happen in the long run if many firms in a perfectly competitive market are experiencing short-run economic losses? A) Firms' costs will decrease, causing their economic profits to increase. B) Firms will enter the industry, causing market demand to increase. C) Firms will go out of business, causing market demand to decrease. D) Firms will enter the industry, causing market supply to increase. E) Firms will go out of business, causing market supply to decrease. Show Answer Correct Answer: E) Firms will go out of business, causing market supply to decrease. 19. The reliance on one another to provide the resources and goods and services that people need. A) Law of demand. B) Businesses. C) Factor market. D) Economic interdependence. Show Answer Correct Answer: D) Economic interdependence. 20. What kind of monopoly often provides public goods? A) Government Monopoly. B) Geographic Monopoly. C) Technological Monopoly. D) Natural Monopoly. Show Answer Correct Answer: A) Government Monopoly. 21. What is the true of a market structure? A) A purely competitive market sells similar products. B) It is the way an individual business is set up. C) An example is a partnership. D) It describes the level of competition between businesses. Show Answer Correct Answer: D) It describes the level of competition between businesses. 22. The easiest form of business to start and end is a(n) A) Limited liability partnership. B) Proprietorship. C) Franchise. D) Monopoly. Show Answer Correct Answer: B) Proprietorship. 23. The least competitive market structure A) Perfect competition. B) Oligopoly. C) Monopoly. D) Monopolistic competition. Show Answer Correct Answer: C) Monopoly. 24. All of these options describe a characteristic of monopolistic competition EXCEPT which option? A) Many buyers. B) Identical products. C) A downward-sloping demand curve. D) No barriers to entry. E) Many sellers. Show Answer Correct Answer: B) Identical products. 25. Which market structure is the worst for consumers? A) Perfect competition. B) Oligopoly. C) Monopolistic competition. D) Geographic monopoly. Show Answer Correct Answer: D) Geographic monopoly. 26. Why do oligopolies frequently appear to act together. A) They collude (secretly scheme together) to keep the prices in their industry unnaturally high. B) If one company has a lower price or a new innovation, all the other companies will have to match it or risk losing customers. C) They are all controlled by one large parent company that delegates what actions each smaller company must perform . D) There is generally only one company that actually comes up with good ideas, and all the other companies follow whatever actions they take. Show Answer Correct Answer: B) If one company has a lower price or a new innovation, all the other companies will have to match it or risk losing customers. 27. This may be the closest to perfect competition A) Ebay. B) Local Farmer's Market. C) Walmart. D) Amazon. Show Answer Correct Answer: B) Local Farmer's Market. 28. A ton of companies make clothing but some brands are able to charge more because of perceived status or quality. this puts them in which market structure A) Monopoly. B) Perfect Competition. C) Monopolistic Competition. D) Oligopoly. Show Answer Correct Answer: C) Monopolistic Competition. 29. Factors that make it difficult and costly for an organization to enter a particular task environment or industry A) Costs. B) Barriers to entry. C) Monopolies. D) Regulations. Show Answer Correct Answer: B) Barriers to entry. 30. Fiscal policy refers to the power of the federal government to A) Tax and spend. B) Print money. C) Control credit. D) All of the above. Show Answer Correct Answer: A) Tax and spend. ← PreviousNext →Related QuizzesMarket Dynamics QuizzesEconomics QuizzesMarket Structures Quiz 1Market Structures Quiz 2Market Structures Quiz 3Market Structures Quiz 4Market Structures Quiz 5Market Structures Quiz 6Market Structures Quiz 8Market Structures Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books