Chapter 7 Econ Test

Based on the graph, the top 4 companies in the soft drink industry produced what percentage of all soft drink output?

85%

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 often results in...

A firm wielding economic and political power.

Perfect competition is characterized by...

A large number of buyers and sellers.

Price-Fixing

Agreeing to charge the same or similar prices for a product.

Trust

Combination of corporations or companies.

Based on the passage, U.S.A. Floral Products differentiated its products from competitors by trying to convince customers that its roses are...

Fresher.

A market structure in which one firm has a monopoly because of its location is a...

Geographic monopoly.

Negative Externality

Harm, cost, or inconvenience suffered by a third party because of the actions of others.

Mergers and acquisitions might result in...

Inadequate competition.

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

Lower their prices.

Natural Monopoly

Market situation in which costs are minimized because a single firm produces the product.

Oligopoly

Market structure in which a few very large sellers dominate the industry.

Under perfect competition,

No seller can sell a product above the prevailing market price.

The letter "Q" in the table represents what federal regulatory agency?

Occupational Safety and Health Administration.

The Clayton Antitrust Act

Outlawed price discrimination.

The Sherman Antitrust Act

Outlawed restraints and monopolies that hindered trade.

Laissez-Faire

Philosophy that government should not interfere with business activities.

According to the passage, companies are trying to compete through...

Product differentiation.

Product Differentiation

Real or imagined differences between competing products.

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

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

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

Robinson-Patman Act

Economies of Scale

Situation in which average cost of production falls as the firm gets larger.

A monopoly that is based on the ownership or control of a manufacturing method, process, or other scientific advance is a...

Technological monopoly.

Perfect Competition

Theoretical situation in which well-informed, independent buyers and sellers exchange identical products.

Externality

Unintended side effect either benefits or harms a third party not involved in the activity.

What letter in the table represents the Securities and Exchange Commission?

W

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 represents the proper location for the market structure "monopoly"?

Z