Chapter 3 quiz B

Government legislation aimed at maintaining competition is termed:

Antitrust

Which of the following markets is an example of monopolistic competition?

Book bags

———— occurs when leaders of competing firms illegally set prices or production levels for products.

Collusion

Tries to persuade consumers that the product being advertised is better than substitute goods.

Competitive advertising

A ———— gives authors, composers, and artists exclusive rights to publish, duplicate, perform, display, or sell their creative works.

Copyright

Exists when a few producers dominate the production of similar goods

Differentiated oligopoly

Exists when firms are large enough to take advantage of mass production techniques

Economies of scale

An example of a positive externality would come from

Education

Each of the following is a condition necessary for the existence of monopolistic competition except:

Firms must offer identical products for sale.

This monopoly occurs when a firm is the only producer or seller of a product in a specific location

Geographic

A monopoly owned and operated by any level of government

Government

Which of the following is not an example of barriers to entry?

In some countries, laws require retail stores to be closed on sundays

Intended to provide consumers with information or price, quality and special features of specific products

Informative advertising

Which of the following statements is true about profits in a monopolistically competitive market?

Many firms will earn profit in the short term, but they must constantly innovate and compete to earn profits in the long term

Economists use the term ———— structure to describe how competitive specific industries are..

Market

Exists when a single firm controls the total production or sale of a product

Monopoly

The market structure in which entry into the industry is the most prohibitive is:

Monopoly

The market structure with the most control over price is:

Monopoly

This monopoly occurs in an industry where competition is inconvenient, impractical, and unworkable

Natural

Advertising the brand name or special features of a product, rather than the price, is an example of ———— competition

Non-price

Sunshine island has theee large supermarkets that supply most of the groceries for the island's population. A gas station also sells a very small selection of groceries. How would you describe the market for groceries on seaside island?

Oligopoly

The largest 3 or 4 firms in an industry produce 70% or more of the industry's total output, the industry is classified as

Oligopoly

A ———— grants a firm or individual the exclusive right to produce, use, or dispose of an invention or discovery for 17 years

Patent

———— competition is a market where sellers and buyers are so large ( homogeneous identical products ), that no seller can control price.

Perfect

The market structure that involves the most competition

Perfect competition

Which of the following market structures has the largest number of firms trying to sell their products?

Perfect competition

In oligopolies, ———— leadership often originates with the largest firm in an industry, which offers its new product at a certain price, hoping that the competing firms will set similar prices for their products

Price

Each of the following is a condition necessary for the existence of perfect competition except:

Prohibitive barriers to entry in the industry must exist

Exists when a few producers dominate the production of an identical product

Pure oligopoly

Which of the following laws first declared monopoly and restraint of trade illegal ?

Sherman Act

This monopoly occurs when a firm develops new technology that changes the way goods are produced or creates an entirely new product

Technological

Huge monopolies called ———— were created by industries in the late 1800s, eventually leading to the passage of legislation designed to monitor and regulate big business, prevent monopolies from forming, and break up existing monopolies

Trusts

What is the definition of an oligopoly?

two to four firms producing a large percentage of the output