Microeconomics (online econ unit 2)

The market for which item generally involves pure competition?

corn

Why is the automobile industry considered an oligopoly?

It has significant barriers to entry. It depends on brand loyalty and image to generate sales. It is dominated by a few key players.

Which describes a way in which consumers most likely benefit from producers' absolute advantage?

Prices decrease as a result of increased production efficiencies.

The chart compares the price of graphic T-shirts to the quantity demanded.

This chart shows the link between interest in a product and the price a consumer pays.

All else being equal, which bakery has the absolute advantage?

Uncle John's

When an oligopoly exists, how many producers dominate the market?

a few

A producer with an absolute advantage has the ability to produce a good or service at

a lower cost than any competitor can.

The term __________, often used in conjunction with absolute advantage, is defined as making the best use of resources.

efficiency

The point where supply and demand meet and prices are set is called

equilibrium

____________ is the type of competition that occurs in a competitive market without identical producers.

monopolisitic

Who sets the price in a monopolistic competition?

producers and consumers

The total amount of a product available in a market at a given price is called the

supply

The graph shows demand. In order to achieve equilibrium, what else must be included on the graph?

supply curve

Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication?

technological monopoly

A factor that most directly affects the demand for automobiles is

the individual tastes and preferences of buyers.

Which company has the comparative advantage in producing large tubes of toothpaste?

Mmmint

The graph shows a point of equilibrium. How many goods must be supplied to achieve equilibrium?

15

Why is competition limited in an oligopoly?

High entry costs prevent new producers from entering the market.

Which scenario is the best example of an opportunity cost?

A computer company produces fewer laptops to meet tablet demand.

Which calculation helps determine which producer has the absolute advantage?

Amount produced divided by resources used

How do changing prices affect supply and demand?

As price decreases, supply decreases, but demand increases.

The graph shows excess demand. Which explains why the price indicated by p2 on the graph is lower than the equilibrium price?

As prices fall, quantity demanded goes up.

Which best describes how consumers may benefit from specialization?

Consumers find products at lower prices.

Which helps enable an oligopoly to form within a market?

Costs of starting a competing business are too high.

Which explains the connection between the law of demand and excess demand?

The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.

How do lower prices tend to affect demand?

They tend to increase the interest in a product.

The graph shows excess demand. Which needs to happen in order to stop disequilibrium from occurring?

The price of goods needs to be increased.

The graph shows a point of equilibrium. If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?

The price of the product will decrease to meet equilibrium.

Which statement best explains the law of supply?

The quantity supplied by producers increases as prices rise and decreases as prices fall.

Which statement best compares the laws of supply and demand?

The two economic laws exist in theory. They work in practice, but real-world factors can have an effect.

What can a producer gain by specializing?

absolute advantage

According to the law of demand, price and quantity move

along a track in opposite directions.

According to the law of supply, price and quantity move

along a track in the same direction.

Which best describes how the government sanctions technological monopolies?

by issuing a patent for the technology

In the United States, which type of industry is often considered part of an oligopoly?

cell phone carriers

A car dealer who does not have enough customers for a supply of new cars faces

disequilibrium

Both excess supply and excess demand are a result of

disequilibrium.

Which best explains why producers choose to specialize? Check all that apply.

to gain a comparative advantage to increase efficiency