Economics Chapter 7

"Pure monopoly" should replace what letter in the table?

Q

What law should replace the letter "Z" in the illustration?

Robinson-Patman Act

Which letter in the illustration represents the proper location for the Clayton Antitrust Act?

X

What letter on the graph represents the proper location for the market structure "oligopoly"?

Y

What letter on the graph represents the proper location for the market structure "monopoly"?

Z

This passage suggests a trend toward (FTC)

[either] decreased competition or corporate expansion.

In the graph, suppose the firm increases production to 148 units. This will result in

a decrease in total profit.

A decrease in competition within an industry can result in

a firm wielding economic and political power.

Based on the passage, U.S.A. Floral Products is differentiating its product from competitors' by trying to convince customers that its roses are

fresher.

Mergers and acquisitions might result in

inadequate competition.

Indirectly, the government has improved the quality of information available to consumers through

its support for the Internet.

When a major car company lowers its prices, other car makers will probably

lower their prices.

By passing truth-in-advertising laws, the government hopes to influence producers, such as the toy manufacturer in the cartoon, to

make better products

Under perfect competition,

no seller sells a product above the prevailing market price.

The Clayton Antitrust Act

outlawed price discrimination.

The Sherman Antitrust Act

outlawed restraints and monopolies that hindered trade.

What market structure does the letter "R" in the table represent?

perfect competition.

On an average shopping trip, a consumer's eye lingers on a product for only about 2.5 seconds. In order to stay competitive, companies experiment with new formulas, along with the color and size of the product's packaging. These research and development costs can range from $100,000 for adding a new color to an existing product line to millions of dollars for the creation of a new product.

product differentiation.

Suppose the government passed a new antitrust law. This law would be an example of which regulatory function of government shown in the illustration?

promote competition

The government is involved in the U.S. economy for all of the following reasons EXCEPT to

promote the development of market externalities.

One reason the government is involved in the U.S. economy is to

regulate industries in which a monopoly is in the public interest.

Suppose the government passed a law, taxing manufacturers according to the amount of pollutants they release into the environment. This law would be an example of which regulatory function of government shown in the illustration?

regulate negative externalities

Perfect competition is characterized by all of the following EXCEPT

sellers acting together to set prices.

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 advance is a

technological monopoly.