Chapter 7 - Market Structure

10 Questions | Total Attempts: 565

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Market Quizzes & Trivia

This a test an economic test on market structure.


Questions and Answers
  • 1. 
    Why doesn’t the market system work to provide street lighting and other public goods?  
    • A. 

      Too few of these services are available.

    • B. 

      Important needs cannot be left to chance.

    • C. 

      Voters put pressure on local governments.

    • D. 

      There is no easy way to charge individual users

  • 2. 
    Why is competition among restaurants in a big city an example of monopolistic competition?  
    • A. 

      Starting a restaurant is expensive.

    • B. 

      Restaurants often go out of business.

    • C. 

      All restaurants serve food, and each restaurant is distinctive.

    • D. 

      All restaurants serve people, and one restaurant serves the most people.

  • 3. 
    Which of these is the best example of an externality?  
    • A. 

      You decide to stop snacking between meals.

    • B. 

      You enjoy looking at your neighbor’s garden.

    • C. 

      Your shoe store stops selling your favorite style.

    • D. 

      Your new bicycle goes faster than you expected

  • 4. 
    In a market with perfect competition, how are prices determined?  
    • A. 

      by supply and demand

    • B. 

      By government regulation

    • C. 

      By cultural ideals of fairness

    • D. 

      By agreement among producers

  • 5. 
    In which market structure do producers have the most market power?  
    • A. 

      Monopolistic competition

    • B. 

      Monopoly

    • C. 

      oligopoly

    • D. 

      Perfect competition

  • 6. 
    Many teenagers in a particular neighborhood work as babysitters a few hours a week. They have different personalities and degrees of experience. What is the market structure for babysitting in that neighborhood?  
    • A. 

      Monopolistic competition

    • B. 

      monopoly

    • C. 

      Oligopoly

    • D. 

      Perfect competition

  • 7. 
    Market structures with only a few producers, each offering a product similar or identical to the others, are typically referred to as  
    • A. 

      Monopoly markets.

    • B. 

      Monopolistically competitive markets.

    • C. 

      Oligopoly markets.

    • D. 

      Competitive markets

  • 8. 
    Under perfect competition,
    • A. 

      no seller sells a product above the market price.

    • B. 

      a single seller can affect price.

    • C. 

      Products are similar but not identical.

    • D. 

      Numerous restrictions prevent firms from entering the market.

  • 9. 
    In this market structure, when a major airline lowers its prices, other airlines will probably
    • A. 

      Go out of business.

    • B. 

      Raise their prices.

    • C. 

      lower their prices.

    • D. 

      Maintain existing prices.

  • 10. 
    Positive and negative externalities are MOSTLY called market failures because
    • A. 

      They provide public goods.

    • B. 

      They lead to higher price.

    • C. 

      They cause imperfect competition.

    • D. 

      their costs and benefits are not reflected in the market prices paid by buyers and sellers (or the demand and supply model).

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