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