Economics Chapter 8 - 11

Approved & Edited by ProProfs Editorial Team
The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.
Learn about Our Editorial Process
| By Karpuch123
Community Contributor
Quizzes Created: 1 | Total Attempts: 157
Questions: 12 | Attempts: 157

Economics Chapter 8 - 11 - Quiz

fun quiz of economics. Makes us love learning about economics. So much fun.

Questions and Answers
  • 1. 

    Choose the matching definitions to the 4 characters of monopoly A) Single Seller B) Price Taker C) No Close Substitution D) Blocked Entry

    • A.

      Control total quantity over price

    • B.

      No competition

    • C.

      One sole producer or seller

    • D.

      Unique product

    Correct Answer(s)
    A. Control total quantity over price
    B. No competition
    C. One sole producer or seller
    D. Unique product
    The correct answer is:
    A) Single Seller - one sole producer or seller
    B) Price Taker - no competition
    C) No Close Substitution - unique product
    D) Blocked Entry - control total quantity over price

    A single seller refers to a monopoly where there is only one producer or seller in the market. Price taker means that there is no competition, and the seller has the power to control the total quantity over the price. No close substitution indicates that the product being sold is unique and cannot be easily replaced by alternatives. Blocked entry refers to the barriers that prevent other sellers from entering the market and competing with the monopoly.

    Rate this question:

  • 2. 

    Define Barriers to Entry

    Correct Answer(s)
    anything that artificially prevents firms from entering an industry
    The definition of barriers to entry is anything that artificially prevents firms from entering an industry. This means that there are certain obstacles or restrictions that make it difficult for new companies to enter a specific market. These barriers can include high startup costs, government regulations, patents, brand loyalty of existing customers, or economies of scale enjoyed by established firms. By having these barriers in place, existing companies can maintain their market power and limit competition.

    Rate this question:

  • 3. 


    Correct Answer(s)
    the product of output, whatever its level, the highest average (and total) cost than is necessary
    X-inefficiency refers to a situation where a firm is producing output at a higher average cost than is necessary. This means that the firm is not utilizing its resources efficiently and is experiencing higher costs in producing its output. This can be due to factors such as poor management, lack of motivation among employees, or outdated production techniques. X-inefficiency leads to a decrease in a firm's competitiveness and profitability as it is incurring unnecessary costs in its production process.

    Rate this question:

  • 4. 

    Price Discrimination

    Correct Answer(s)
    the selling of a product to two different buyers at different prices when the price differences are not justified by differences in cost
    Price discrimination refers to the practice of selling a product to different buyers at varying prices, even when there is no significant difference in the cost of production or distribution. This strategy allows businesses to maximize their profits by charging higher prices to customers who are willing to pay more, while offering lower prices to customers who are more price-sensitive. This form of discrimination can be seen in various industries, such as airlines offering different fares for the same flight or movie theaters charging different ticket prices based on age or time of day.

    Rate this question:

  • 5. 

    Describe the conditions before a firm can practice price discrimination A) Monopoly Power B) Market Segregation C) No Resale

    Correct Answer(s)
    A) seller must be able to control output and price B) seller must be able to segregate buyers C) original purchaser cannot resell product
    Price discrimination occurs when a firm charges different prices for the same product or service to different groups of customers. In order for a firm to practice price discrimination, it must have the ability to control both the output and the price of the product. This means that the firm must have some level of monopoly power in the market. Additionally, the firm must be able to segregate buyers, meaning that it can identify and target different groups of customers who are willing to pay different prices. Finally, the original purchaser of the product must not be able to resell it, as this would undermine the firm's ability to charge different prices to different customers.

    Rate this question:

  • 6. 

    Three Characteristics of Monopolistic Competition

    Correct Answer(s)
    Small market shares, no collusion, independent action
    Monopolistic competition refers to a market structure where there are many small firms that sell similar but slightly differentiated products. The first characteristic, small market shares, implies that no single firm has a dominant position in the market, and each firm has a relatively small market share. The second characteristic, no collusion, means that firms in monopolistic competition do not engage in collusion or secret agreements to manipulate prices or restrict competition. Lastly, independent action refers to the fact that firms in monopolistic competition make decisions independently, considering factors such as pricing, marketing, and product differentiation, without coordination with other firms.

    Rate this question:

  • 7. 

    Define Excess Capacity

    Correct Answer(s)
    plant or equipment is underused because the firm is producing less than the minimum-ATC output
    The term "excess capacity" refers to a situation where a firm's plant or equipment is not being fully utilized because the firm is producing less than the minimum average total cost (ATC) output. This means that the firm has the ability to produce more goods or services, but chooses not to do so because it is not economically efficient. This can occur due to various reasons such as lower demand for the firm's products or inefficient production processes. In such cases, the firm may have idle resources that could be better utilized to increase productivity and profitability.

    Rate this question:

  • 8. 

    Six Characteristics of Oligopoly

    Correct Answer(s)
    a few large producers, differentiated products, control over price, entry barriers, mergers, measures of industry concentration
    The given answer correctly lists the six characteristics of an oligopoly: a few large producers, differentiated products, control over price, entry barriers, mergers, and measures of industry concentration. These characteristics are commonly associated with oligopolistic markets, where a small number of firms dominate the industry and have significant control over pricing and market behavior. Differentiated products and entry barriers further contribute to the market power of oligopolies, while mergers and measures of industry concentration reflect the tendency for consolidation and concentration of power within these markets.

    Rate this question:

  • 9. 

    Define Collusion

    Correct Answer(s)
    a situation in which firms act together and in agreement to fix prices, divide a market or restrict competition
    Collusion refers to a scenario where multiple firms collaborate and conspire with each other to manipulate market conditions in their favor. This can involve activities such as price-fixing, where the firms agree to set prices at artificially high levels, or market division, where they allocate specific territories or customers among themselves. Collusion is also characterized by efforts to restrict competition, often through agreements to not compete with each other or by creating barriers to entry for new competitors.

    Rate this question:

  • 10. 

    Define Cartel

    Correct Answer(s)
    an agreement among firms in an industry to set the price of a product and establish the outputs of each firm or to divide the market among them
    The correct answer defines a cartel as an agreement among firms in an industry. This agreement is aimed at setting the price of a product, determining the outputs of each firm, or dividing the market among them. In other words, a cartel involves collusion among competitors to manipulate market conditions in their favor, often resulting in higher prices and reduced competition.

    Rate this question:

  • 11. 

    Three Obstacles to Collusion -demand and cost differences -number of firms -cheating

    Correct Answer(s)
    -demand and cost differences -number of firms -cheating
    The three obstacles to collusion are demand and cost differences, the number of firms, and cheating. Demand and cost differences refer to the variation in the market demand and production costs among the colluding firms, making it difficult for them to agree on pricing and output levels. The number of firms also poses a challenge as collusion becomes more difficult to maintain with a larger number of participants. Lastly, cheating refers to the temptation for individual firms to deviate from the agreed-upon collusive behavior in order to gain a competitive advantage. These obstacles make it challenging for firms to successfully collude and maintain a coordinated market behavior.

    Rate this question:

  • 12. 

    Positives in Advertising - name 3

    Correct Answer(s)
    inform consumer of product, promotes name,
    The three positives in advertising are: informing the consumer about the product, promoting the name of the brand, and creating awareness about the product among potential customers. By informing consumers about the product, advertising helps them make informed decisions. Promoting the brand name helps in establishing brand recognition and loyalty. Creating awareness about the product ensures that it reaches a wider audience and increases the chances of sales.

    Rate this question:

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jun 03, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Nov 22, 2009
    Quiz Created by
Back to Top Back to top

Here's an interesting quiz for you.

We have other quizzes matching your interest.