PracticeTestMB_9-12-F - CHAPTER 9 - Pure Competition...

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CHAPTER 9 - Pure Competition [REPEAT from Teat II] Multiple Choice Questions 1. Economists would describe the U.S. automobile industry as: A) purely competitive. B) an oligopoly. C) monopolistically competitive. D) a pure monopoly. Answer: B 2. In which of the following market structures is there clear-cut mutual interdependence with respect to price- output policies? A) pure monopoly B) oligopoly C) monopolistic competition D) pure competition Answer: B 3. Which of the following industries most closely approximates pure competition? A) agriculture B) farm implements C) clothing D) steel Answer: A 5. In which of the following industry structures is the entry of new firms the most difficult? A) pure monopoly B) oligopoly C) monopolistic competition D) pure competition Answer: A 6. An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product is an example of: A) monopolistic competition B) oligopoly C) pure monopoly D) pure competition Answer: A 7. A one-firm industry is known as: A) monopolistic competition B) oligopoly C) pure monopoly D) pure competition Answer: C 8. An industry comprised of four firms, each with about 25 percent of the total market for a product is an example of: A) monopolistic competition B) oligopoly C) pure monopoly D) pure competition Answer: B 9. An industry comprised of a very large number of sellers producing a standardized product is known as: A) monopolistic competition B) oligopoly C) pure monopoly D) pure competition Answer: D 10. An industry comprised of a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions is called: A) monopolistic competition B) oligopoly C) pure monopoly D) pure competition Answer: B Pure competition defined; demand curve 11. Which of the following statements applies to a purely competitive producer? A) It will not advertise its product. B) In long-run equilibrium it will earn an economic profit. C) Its product will have a brand name. D) Its product is slightly different from those of its competitors. Answer: A 12. A purely competitive seller is:
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A) both a "price maker" and a "price taker." C) a "price taker." B) neither a "price maker" nor a "price taker." D) a "price maker." Answer: C 13. Which of the following is not characteristic of pure competition? A) price strategies by firms C) no barriers to entry B) a standardized product D) a larger number of sellers Answer: A 14. Which of the following is not a basic characteristic of pure competition? A) considerable nonprice competition C) a standardized or homogeneous product B) no barriers to the entry or exodus of firms D) a large number of buyers and sellers Answer: A 15. The demand schedule or curve confronted by the individual purely competitive firm is: A) relatively elastic, that is, the elasticity coefficient is greater than unity.
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This note was uploaded on 05/04/2011 for the course ECON 102 taught by Professor Gini during the Spring '11 term at Salt Lake Community College.

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PracticeTestMB_9-12-F - CHAPTER 9 - Pure Competition...

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