Chapter 7 Review Made by students

1. Which of the following is a public good? A. National defense B. Police C. Highways D. All of the above

2. Externalities are: A. Unintended side effects B. Inadequate competition C. Inadequate information D. All of the above

3. Oligopolies consist of A. One seller B. Few large sellers C. Many sellers D. None of the above

4. Monopolistic competition is the same thing as perfect competition. True or False?

5. There are four types of monopolies. True or False?

6. When buyers and sellers deal in identical products: A. Monopolistic competition B. Oligopoly C. Perfect competition D. Market structures

7. Collusion is: A. An agreement to charge the same price for a product B. A formal agreement to act in a cooperative manner C. When one company lowers their price, other will lower theirs D. Art and literary works for a lifetime plus 50 years

8. One seller of a product is: A. A monopoly B. Monotous seller C. A one man team

9. The Sherman Anti-Trust Act forbade discounts to certain buyers. True or False?

10. A price war may occur if one company lowers their price and others follow. True or False?

11. Negative externalities affect the third party by harm or inconvenience. True or False?

12. Public goods can be withheld. True or False?

13. A market structure is the nature and degree of competition among firms operating in the same industry. True or False?

14. Five reasons markets fail include all of the following except: A. Resource mobility B. Inadequate competition and information C. Negative externalities D. It includes all of these

15. There are 5 market structures. True or False?

16. What did the Clayton Antitrust Act outlaw? A. Monopolies B. Discounts of goods to large buyers C. Price discrimination D. pollution

17. An externality is : A. The result of inadequate competition B. Positive or negative C. An unintended side effect D. Something that cannot be withheld

18. A positive externality is a benefit received by a 3rd party that had nothing to do with the activity. True or False

19. A cable or gas company has what type of monopoly? A. Natural B. Government C. Technological D. Geographic

20. Adequate competition is one reason why markets fail. True or False?

21. What is an exclusive right to produce, use or sell any new invention? A. Patent B. Copyright C. Sherman Anti-trust Act D. Clayton Anti-trust Act

22. There is no “real perfect competition”—it is used to evaluate other market structures. True or False?

23. The reason government participates is because: A. They promote and encourage competition B. Prevent monopolies C. Fulfill the need for public goods D. All of the above

24. Inadequate information is when knowledge that is important to buyers is hard to find. True or False?

25. Pollution is an example of a positive externality. True or False?

26. Requirement that businesses reveal information to the public is: A. Public disclosure B. Internalizing externalities C. Monopoly D. commission

27. Which of the following is not a type of monopoly? A. Natural B. Government C. Physical D. Geographic

28. Which of the following is NOT a public good? A. Highway B. Police C. Firefighters D. Nasa

29. Wal-Mart is considered a monopoly. True or False?

30. The United States has many monopolies. True or False?

31. Internalizing externalities is a tax system to lessen negative externalities. True or False?

32. An oligopoly has a few large sellers that dominate the industry and a single firm can change output, sales and price. True or False?

33. In perfect competition, buyers and sellers act independently. True or False?

34. An example of a public good is a home computer. True or False?

1. Which of the following is a public good? A. National defense B. Police C. Highways D. All of the above

2. Externalities are: A. Unintended side effects B. Inadequate competition C. Inadequate information D. All of the above

3. Oligopolies consist of A. One seller B. Few large sellers C. Many sellers D. None of the above

4. Monopolistic competition is the same thing as perfect competition. True or false? FALSE—products are different and they use advertising

5. There are four types of monopolies. True or False? TRUE

6. When buyers and sellers deal in identical products: A. Monopolistic competition B. Oligopoly C. Perfect competition D. Market structures

7. Collusion is: A. An agreement to charge the same price for a product B. A formal agreement to act in a cooperative manner C. When one company lowers their price, other will lower theirs D. Art and literary works for a lifetime plus 50 years

8. One seller of a product is: A. A monopoly B. Monotous seller C. A one man team

9. The Sherman Anti-Trust Act forbade discounts to certain buyers. True or False? False—it was the first law against monopolies

10. A price war may occur if one company lowers their price and others follow. True or False? TRUE

11. Negative externalities affect the third party by harm or inconvenience. True or False? TRUE

12. Public goods can be withheld. True or False? False—everyone receives public goods regardless of income or ability to pay

13. A market structure is the nature and degree of competition among firms operating in the same industry. True or False? TRUE

14. Five reasons markets fail include all of the following except: A. Resource mobility (should be immobility) B. Inadequate competition and information C. Negative externalities D. It includes all of these

15. There are 5 market structures. True or False? False—4 market structures: Perfect competition Monopolisitic competition Oligopoly Monopoly

16. What did the Clayton Antitrust Act outlaw? A. Monopolies B. Discounts of goods to large buyers C. Price discrimination D. pollution

17. An externality is : A. The result of inadequate competition B. Positive or negative C. An unintended side effect D. Something that cannot be withheld

18. A positive externality is a benefit received by a 3rd party that had nothing to do with the activity. True or False TRUE

19. A cable or gas company has what type of monopoly? A. Natural B. Government C. Technological D. Geographic

20. Adequate competition is one reason why markets fail. True or False? FALSE—inadequate competition

21. What is an exclusive right to produce, use or sell any new invention? A. Patent B. Copyright C. Sherman Anti-trust Act D. Clayton Anti-trust Act

22. There is no “real perfect competition”—it is used to evaluate other market structures. True or False? TRUE—the closest thing to perfect competition is truck farming or a farmers market

23. The reason government participates is because: A. They promote and encourage competition B. Prevent monopolies C. Fulfill the need for public goods D. All of the above

24. Inadequate information is when knowledge that is important to buyers is hard to find. True or False? TRUE

25. Pollution is an example of a positive externality. True or False? FALSE—it is a negative externality

26. Requirement that businesses reveal information to the public is: A. Public disclosure B. Internalizing externalities C. Monopoly D. commission

27. Which of the following is not a type of monopoly? A. Natural B. Government C. Physical D. Geographic

28. Which of the following is NOT a public good? A. Highway B. Police C. Firefighters D. Nasa

29. Wal-Mart is considered a monopoly. True or False? False

30. The United States has many monopolies. True or False? FALSE—actually very few

31. Internalizing externalities is a tax system to lessen negative externalities. True or False? TRUE—the gov’t taxes in order to lessen negative side effects.

32. An oligopoly has a few large sellers that dominate the industry and a single firm can change output, sales and price. True or False? TRUE

33. In perfect competition, buyers and sellers act independently. True or False? TRUE

34. An example of a public good is a home computer. True or False? False—a computer in a library would be a public good—not a computer in your own home