economics chapter 7 practice test
Which letter in the illustration represents the proper location for the Clayton Antitrust Act?
X outlawed price discrimination
What letter on the graph represents the proper location for the market structure "monopoly"?
Z less competition
A decrease in competition within an industry can result in
a firm wielding economic and political power
perfect competition is characterized by what?
a large number of buyers and sellers
natural monopoly
a market situation in which the costs of production are minimized by having a single firm produce the product
price fixing
agreeing to charge the same or similar prices for a product
According to the passage, what are the possible trade offs for consumers in return for reduced pollution?
cost of those vehicles would increase, as well as the fact that all gasoline prices will be increased. This means that for the consumers, the price point to run a car or purchase a sports vehicle or pickup truck will be increased.
trust
illegal combination of corporations or companies organized to hinder competition
oligopoly
market structure in which a few very large sellers dominate the industry
differences in how oligopoly and a monopoly conduct business
monopoly is single firm with no close substitute oligopoly is small number of large firms
the sherman antitrust act
outlawed restraints and monopolies that hindered trade
What market structure does the letter "R" in the table represent?
perfect competition
laissez-faire
philosophy that government should not interfere with business activity
product differentiation
real or imagined differences between competing products in the same industry
One reason the government is involved in the U.S. economy is to
regulate industries in which a monopoly is in the public interest
economies of scale
situation in which average cost of production falls as the firm gets larger
Based on the passage, what type of monopoly is helping Gillette Co. maintain a high price for its Mach3 razor?
technological monopoly
a monopoly that is based on the ownership or control of a manufacturing method, process, or other scientific advice is a what?
technological monopoly
negative externality
the harm, cost, or inconvenience suffered by a third party because of actions by others
perfect combination
theoretical situation in which well informed, independent buyers and sellers exchange identical products
what was the general trend in prices from 2008 to 2012
they all decreased
externality
unintended side effect that either benefits or harms a third party not involved in the activity that caused it
