What is it called when a few major firms dominate a particular market? an oligopoly

What is it called when an oligopoly colludes to set prices & ruin competition? a cartel

What is it called when a monopolist charges different prices to different consumers? Examples? price discrimination kids stay free, discount for early purchase, etc.

What is a “price war”? when members of an oligopoly stop colluding and try to undersell each other with increasingly lower prices

What are two conditions that must be present for a monopoly to exist? single seller, no substitutes, difficult market entry

Name two different types of monopoly? natural, geographic, technological, and government

What type of monopoly occurs when competition would drive prices below per unit production costs? Natural monopoly

Identify two factors that place price pressure on monopolies. consumer demand, potential competition, & gov’t regulation

How does deregulation effect companies? It decreases the amount of government restrictions on the business.

Selling a product below cost to drive competitors out of the market is: Predatory Pricing

What are four Conditions of Monopolistic Competition? Many firms, few artificial barriers to entry, slight control over price, differentiated products

What is the name for a situation in which many buyers and sellers compete under the laws of supply and demand? perfect competition

What is the opposite of perfect competition? monopolistic competition

What is product differentiation? monopolies using small differences and marketing campaigns to set their products apart

What is the name for the practice of competition based on brand identity rather than price? non-price competition

Give an example of economies of scale. Hydroelectric plant and telephone service- high start up cost, cost per unit decreases as output rises.

What is the primary purpose of anti-trust legislation? eliminate imperfect competition

What are two of the main benefits of a sole proprietorship?  ease of start up, full personal control, exclusive right to the profits

What are the three basic functions of money?  Medium of exchange, standard of value, store of value

Name 3 of the necessary characteristics of money.  Durability, portability, divisibility, stability of value, and acceptability

What is representative money?  When the money actually represents a valuable commodity

What is fiat money? Name a major country that uses this form.  When money has value b/c of government decree, the U.S.

What are the three components of Bonds?  Coupon rate, maturity, par value

What are low risk ways to invest money?  Money market account, CD’s, savings bonds, savings accounts

What is the strategy that spreads out investments to reduce risk?  Diversification

What U.S. president dismantled the first national bank?  Andrew Jackson

Which period of U.S. history has been marked by reform and regulation in the Banking industry?  The last 90 years

Name two New Deal banking reforms.  FDIC, can’t sell securities, can’t redeem dollars for gold, margin & reserve limits

What was the S & L crisis of the late 1980’s?  Many S & L’s went under because of bad loans & help from Congress that loosened their regulations

What major change in Federal banking was caused by the Panic of 1907?  The Federal Reserve System (FED)

How many FED district banks are there? Who do they supervise?  12, the member banks in their respective regions

What is the primary influence the FED has over the economy?  They can regulate the money supply