1. Chapter 7 Review
Made by students

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

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

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

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

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

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

8. 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

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

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

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

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

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

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

15. 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

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

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

18. 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

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

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

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

22. 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

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

24. 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

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

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

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

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

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

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

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

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

33. 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?

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

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

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

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

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

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

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

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

42. 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

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

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

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

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

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

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

49. 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

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

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

52. 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

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

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

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

56. 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

57. 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

58. 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

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

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

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

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

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

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

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

66. 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.

67. 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

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

69. 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