Question 1

Which of the following characteristics is required for a perfectly competitive market?

Accepted Answer

A) The goods offered for sale are exactly the same. 
B) There are so many buyers and sellers that no single buyer or seller has any influence over the market price. 
C) It is difficult for new sellers to enter the market. 
D) Both a and b are correct. 
A) The goods offered for sale are exactly the same. 
B) There are so many buyers and sellers that no single buyer or seller has any influence over the market price. 
C) It is difficult for new sellers to enter the market. 
D) Both a and b are correct.

Question 2

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A) Sellers set the price of the product. 
B) There are many sellers. 
C) Buyers must accept the price the market determines. 
D) All of the above are characteristics of a perfectly competitive market. 
A) Sellers set the price of the product. 
B) There are many sellers. 
C) Buyers must accept the price the market determines. 
D) All of the above are characteristics of a perfectly competitive market.

Question 3

Assume Leo buys coffee beans in a competitive market.It follows that

Accepted Answer

A) Leo has a limited number of sellers from which to buy coffee beans. 
B) Leo will negotiate with sellers whenever he buys coffee beans. 
C) Leo can influence the price of coffee beans if he buys a large quantity of them. 
D) None of the above is correct. 
A) Leo has a limited number of sellers from which to buy coffee beans. 
B) Leo will negotiate with sellers whenever he buys coffee beans. 
C) Leo can influence the price of coffee beans if he buys a large quantity of them. 
D) None of the above is correct.

Question 4

In competitive markets,which of the following is not correct?

Accepted Answer

A) Firms produce identical products. 
B) No individual buyer can influence the market price. 
C) Some sellers can set prices. 
D) Buyers are price takers. 
A) Firms produce identical products. 
B) No individual buyer can influence the market price. 
C) Some sellers can set prices. 
D) Buyers are price takers.

Question 5

An example of a perfectly competitive market would be the

Accepted Answer

A) cable TV market. 
B) soybean market. 
C) breakfast cereal market. 
D) shampoo market. 
A) cable TV market. 
B) soybean market. 
C) breakfast cereal market. 
D) shampoo market.

Question 6

In a competitive market,the price of a product

Accepted Answer

A) is determined by buyers,and the quantity of the product produced is determined by sellers. 
B) is determined by sellers,and the quantity of the product produced is determined by buyers. 
C) and the quantity of the product produced are both determined by sellers. 
D) None of the above is correct. 
A) is determined by buyers,and the quantity of the product produced is determined by sellers. 
B) is determined by sellers,and the quantity of the product produced is determined by buyers. 
C) and the quantity of the product produced are both determined by sellers. 
D) None of the above is correct.

Question 7

Assume the market for tennis balls is perfectly competitive.When one tennis ball producer exits the market,

Accepted Answer

A) the price of tennis balls increases. 
B) the price of tennis balls decreases. 
C) the price of tennis balls does not change. 
D) there is no longer a market for tennis balls. 
A) the price of tennis balls increases. 
B) the price of tennis balls decreases. 
C) the price of tennis balls does not change. 
D) there is no longer a market for tennis balls.

Question 8

The market for ice cream is a

Accepted Answer

A) monopolistic market. 
B) highly competitive market. 
C) highly organized market. 
D) Both b and c are correct. 
A) monopolistic market. 
B) highly competitive market. 
C) highly organized market. 
D) Both b and c are correct.

Question 9

If a seller in a competitive market chooses to charge more than the going price,then

Accepted Answer

A) the sellers' profits must increase. 
B) the owners of the raw materials used in production would raise the prices for the raw materials. 
C) other sellers would also raise their prices. 
D) buyers will make purchases from other sellers. 
A) the sellers' profits must increase. 
B) the owners of the raw materials used in production would raise the prices for the raw materials. 
C) other sellers would also raise their prices. 
D) buyers will make purchases from other sellers.

Question 10

In competitive markets,buyers

Accepted Answer

A) are price takers,but sellers are price setters. 
B) are price setters,but sellers are price takers. 
C) and sellers are price takers. 
D) and sellers are price setters. 
A) are price takers,but sellers are price setters. 
B) are price setters,but sellers are price takers. 
C) and sellers are price takers. 
D) and sellers are price setters.

Question 11

In a competitive market,the quantity of a product produced and the price of the product are determined by

Accepted Answer

A) buyers. 
B) sellers. 
C) both buyers and sellers. 
D) None of the above is correct. 
A) buyers. 
B) sellers. 
C) both buyers and sellers. 
D) None of the above is correct.

Question 12

Which of the following is an example of a less-than-highly-organized market?

Accepted Answer

A) the market for U.S.Treasury bonds 
B) the market for corn 
C) the market for soybeans 
D) the market for ice cream 
A) the market for U.S.Treasury bonds 
B) the market for corn 
C) the market for soybeans 
D) the market for ice cream

Question 13

For a competitive market,

Accepted Answer

A) a seller can always increase her profit by raising the price of her product. 
B) if a seller charges more than the going price,buyers will go elsewhere to make their purchases. 
C) a seller often charges less than the going price to increase sales and profit. 
D) a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time. 
A) a seller can always increase her profit by raising the price of her product. 
B) if a seller charges more than the going price,buyers will go elsewhere to make their purchases. 
C) a seller often charges less than the going price to increase sales and profit. 
D) a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.

Question 14

The highest form of competition is called

Accepted Answer

A) absolute competition. 
B) cutthroat competition. 
C) perfect competition. 
D) market competition. 
A) absolute competition. 
B) cutthroat competition. 
C) perfect competition. 
D) market competition.

Question 15

An example of a perfectly competitive market would be the market for

Accepted Answer

A) tennis racquets. 
B) pizza. 
C) garbage collection. 
D) wheat. 
A) tennis racquets. 
B) pizza. 
C) garbage collection. 
D) wheat.

Question 16

Assume a market is perfectly competitive.When a new producer enters the market,the

Accepted Answer

A) price in the market increases. 
B) price in the market decreases. 
C) price in the market does not change. 
D) market is no longer a competitive market. 
A) price in the market increases. 
B) price in the market decreases. 
C) price in the market does not change. 
D) market is no longer a competitive market.

Question 17

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A) a restaurant in a large city 
B) a dry cleaners in a large city 
C) a local gas station 
D) a local electrical company 
A) a restaurant in a large city 
B) a dry cleaners in a large city 
C) a local gas station 
D) a local electrical company

Question 18

When all market participants are price takers who have no influence over prices,the markets have

Accepted Answer

A) only a few buyers and sellers. 
B) numerous sellers but only a few buyers. 
C) numerous buyers but only a few sellers. 
D) numerous buyers and sellers. 
A) only a few buyers and sellers. 
B) numerous sellers but only a few buyers. 
C) numerous buyers but only a few sellers. 
D) numerous buyers and sellers.

Question 19

Which of the following is an example of a market?

Accepted Answer

A) a gas station 
B) a garage sale 
C) a barber shop 
D) All of the above are examples of markets. 
A) a gas station 
B) a garage sale 
C) a barber shop 
D) All of the above are examples of markets.

Question 20

Buyers and sellers who have no influence on market price are referred to as

Accepted Answer

A) market pawns. 
B) monopolists. 
C) price takers. 
D) price setters. 
A) market pawns. 
B) monopolists. 
C) price takers. 
D) price setters.

Exam 4: The Market Forces of Supply and Demand:Markets and Competition

Which of the following characteristics is required for a perfectly competitive market?

Which of the following is not a characteristic of a perfectly competitive market?

Assume Leo buys coffee beans in a competitive market.It follows that

In competitive markets,which of the following is not correct?

An example of a perfectly competitive market would be the

In a competitive market,the price of a product

Assume the market for tennis balls is perfectly competitive.When one tennis ball producer exits the market,

The market for ice cream is a

If a seller in a competitive market chooses to charge more than the going price,then

In competitive markets,buyers

In a competitive market,the quantity of a product produced and the price of the product are determined by

Which of the following is an example of a less-than-highly-organized market?

For a competitive market,

The highest form of competition is called

An example of a perfectly competitive market would be the market for

Assume a market is perfectly competitive.When a new producer enters the market,the

Which of the following would most likely serve as an example of a monopoly?

When all market participants are price takers who have no influence over prices,the markets have

Which of the following is an example of a market?

Buyers and sellers who have no influence on market price are referred to as

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A