Economics chapter 7

Which market structure is defined by a single producer?

monopoly

Perfect competition stipulates that all buyers and sellers have perfect _______ of all the ______ in the market.

knowledge, conditions

Pure competition demands that there be a very ______ number of buyers and sellers, and that all products be ______.

large, identical

What level of government is most closely associated with zoning?

local

By promoting transparency, the government can improve _______ .

market efficiency

condition that has none of the requirements for a competitive market—adequate competition, knowledge of prices and opportunities, mobility of resources, and competitive profits ________ ________

market failure

Pure competition is a theoretical ____________________ that requires three conditions: very large numbers, identical products, and freedom of entry and exit.

market structure

In pure competition, ________ supply and demand set the ______ price of a product.

market, equilibrium

Which of the following is not one of the five main causes of market failures?

too much competition

In the late ______ monopolies were called ______ , and laws were passed to break them up to increase competition.

1800's, trusts

If a shoe company pays a professional athlete to wear shoes it makes, it is an example of _______ .

1. imperfect competition 2. product differentiation 3. non-price competition

Which of the following do economists use to classify markets?

1. number of firms 2. size of firms 3. type of product

____________________ is an illegal agreement among producers to fix prices, limit output, or divide markets.

Collusion

A mortgage is a document in which a lender reclaims a property due to a lack of payment by the borrower.

False

Because private business is involved in certain aspects of our economy, it is a modified version of free enterprise.

False

Price discrimination is the practice of setting prices to maximize sales.

False

The _____ Administration makes sure the food we eat will not make us sick, and the Federal Aviation Administration regulates ______ training and airport and airplane safety.

Food, pilots

Which statement is most accurate?

Markets can sometimes fail.

____________________ is a market structure having all conditions of pure competition except for identical products.

Monopolistic competition

____________________ is based on a product's appearance, quality, or design.

Non-price competition

The government does not try to eliminate all monopolies. Why?

Not all monopolies are bad.

A market structure in which a few large sellers dominate and have the ability to affect prices in the industry is called a(n) ____________________ .

Oligopoly

What happens when some of the costs or benefits associated with production and consumption fall on someone other than the producers or consumers of a product?

There are unintended effects or spillovers.

Externalities or spillovers can be both good and bad.

True

In the United States, the federal government enforces antitrust laws and regulations to try to maintain effective levels of competition.

True

Laws and regulations have been adopted in the United States to promote competition among firms.

True

What do externalities indicate?

a market failure

There are numerous federal ______ that are responsible for seeing to it that the public ______ is ensured.

agencies, safety

Which would an economist say best describes a "trust"?

an illegal combination

Government agencies can stop practices that reduce ______ by issuing ____________________ orders against offending companies.

competition, cease and desist

In pure competition, how much of a product a business produces is determined when the marginal ________ of production equals to marginal ______ from sales.

cost, revenue

calculation that compares the cost of an action to its benefits

cost-benefit analysis

A plant in a small town closes, leaving hundreds of people unemployed. There are jobs available at a similar plant in another state, but many of the unemployed workers are unwilling to move or cannot afford to move. An economist might use this example to _______ .

define resource immobility

Price ______ involves selling the same product to different _______ at different prices.

discrimination, consumers

Which of the following is a benefit for monopolies?

economies of scale

Under pure competition, market supply and demand set the ______ price for a product.

equilibrium

unintended side effects that either benefit or harm a third party not involved in the activity that caused it

externalities

Since the Great Recession of 2008, government agencies have required banks to reveal in simple language the terms of home _______ so people know how much they have to pay and are less likely to suffer _______ for nonpayment.

mortgages, foreclosure

A ________ monopoly may be allowed to function because its economies of ______ enable it to provide necessary services or products at a low cost to many consumers.

natural, scale

harm suffered by a third party because of the actions of others ________

negative spillover

Businesses often use ________ competition, such as promotions and aggressively _______ the product on TV or online, to lure consumers into buying it.

non-price, advertising

Which of the following can cause market failure?

not enough information

economic products that are paid for and consumed collectively, such as highways, national defense, police and fire protection ________

public good

What is the opposite of a monopoly?

pure competition

The market structure called perfect competition is best described as _______ .

theoretical

The government may require public ______ for business in order to keep the public informed of a business's actions as well as _________ data so important to stockholders.

transparency, revealing

In monopolistic competition, businesses emphasize the _______ of their product in order to get the ______ price for it.

uniqueness, highest