Chapter 06 - Perfect Competition

Chapter 06 - Perfect Competition - Practice Test...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Page 1 of 28 Practice Test Microeconomics: Theory and Policy Chapter 06: Perfect Competition UCD Students: Ignore the Yellow Highlighted Questions B. Modjtahedi Question 1 What is perfect competition? It is an industry structure in which: A. A few firms are engaged in cutthroat competition. B. A relatively large number of firms producing slightly differentiated products compete against each for market share. C. Two firms producing slightly differentiated products compete against each for market share. D. Any of the above industry structures can qualify as perfect competition. E. None of the above. Question 2 What is the correct definition of perfect competition? It is an industry structure in which: A. A large number of small price-taking firms with perfect information about the market and technology conditions produce an identical product. B. A large number of small price-taking firms with perfect information about the market and technology conditions produce slightly differentiated products. Entry into and exit from the industry is easy. C. A large number of small price-taking firms with perfect information about the market and technology conditions produce an identical product. Entry into and exit from the industry is free. D. A small number of large price-taking firms with perfect information about the market and technology conditions produce an identical product. Entry into and exit from the industry is free. E. None of the above. Question 3 Which industry structure is characterized by a large number of firms producing an identical product? A. Perfect competition. B. Monopolistic competition. C. Oligopoly. D. Monopoly. E. None of the above. Question 4 Which industry structure is characterized by a large number of firms producing differentiated products? A. Perfect competition. B. Monopolistic competition. C. Oligopoly. D. Monopoly. E. None of the above.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Page 2 of 28 Question 5 Which industry structure is characterized by a small number of firms producing either identical or differentiated products? A. Perfect competition. B. Monopolistic competition. C. Oligopoly. D. Monopoly. E. None of the above. Question 6 Which industry structure is characterized by a single producer? A. Perfect competition. B. Monopolistic competition. C. Oligopoly. D. Monopoly. E. None of the above. Question 7 Since a perfectly competitive firm is too small relative to the size of the market, A. It has the freedom to set its own price. B. It has to compete for market share against other firms. C. It can make more money if it increases its price relative to the market price. D. It has to take the market price as given. E. None of the above. Question 8 The perfectly competitive model assumes that, A. The incumbent firms know more about the prevailing technology than the new entrants to the industry.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 28

Chapter 06 - Perfect Competition - Practice Test...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online