Chapter 7- Section 1

Question 0

Refers to the supply side of the market, or all producers collectively

Answer 0

Industry

Question 1

The philosophy that government should not interfere with commerce or trade

Answer 1

Laissez-Faire

Question 2

The nature and degree of competition among firms operating in the same industry

Answer 2

Market structure

Question 3

A large number of well-informed independent buyers and sellers who exchange identical products

Answer 3

Perfect Competition

Question 4

Large number of buyers and sellers, no single buyer or seller large enough to affect the price

Answer 4

First condition of prefect competition

Question 5

Buyers and sellers deal in identical products with no difference in quality

Answer 5

Second condition of perfect competition

Question 6

Each buyer and seller act independently, ensuring buyers compete against one another for the buyers dollar and buyers compete to find the best price

Answer 6

Third condition of perfect competition

Question 7

Buyers and sellers are reasonably well informed about products and prices.

Answer 7

Fourth condition of perfect competition

Question 8

Buyers and sellers free to enter into, conduct, or get out of business

Answer 8

Fifth condition of perfect competition

Question 9

What sets the equilibrium price in a perfect competition?

Answer 9

Supply and demand

Question 10

A market structure that lacks one or more of the conditions of perfect competition.

Answer 10

Imperfect Competition

Question 11

The market structure that has all the conditions of perfect competition except for identical products

Answer 11

Monopolistic Competition

Question 12

Real or imagined differences between competing products in the same industry

Answer 12

Product Differenitiation

Question 13

The use of advertising, giveaways, or other promotional campaigns to convince buyers that the product is somehow better than another brands

Answer 13

Nonprice Competition

Question 14

Changing the view of the product in the mind of the buyer

Answer 14

Differentiate

Question 15

Monopolistic competition is easy to enter into. True or false?

Answer 15

True.

Question 16

Market structure in which a few very large sellers dominate the industry

Answer 16

Oligopoly

Question 17

Because oligopolistic structures are so large, ….

Answer 17

When one firm acts the other firms usually follow.

Question 18

A formal agreement to set prices or to otherwise behave in a cooperative manner

Answer 18

Collusion

Question 19

Agreeing to charge the same or similar prices for a product

Answer 19

Price-fixing

Question 20

Are collisions against the law?

Answer 20

Yes, they restrain trade.

Question 21

What is a price war?

Answer 21

A series of price cuts that result in unusually low prices

Question 22

Easy to enter into an oligopoly. True or false?

Answer 22

False, it is very difficult.

Question 23

Market structure with only one seller of a particular product

Answer 23

Monopoly

Question 24

Local telephone companies, cable TV, and utilities are examples of?

Answer 24

Monopolies

Question 25

Market situation where the costs of production are minimized by having a single firm produce the product

Answer 25

Natural monopoly

Question 26

The exclusive right to do business in a certain area without competition

Answer 26

Franchise

Question 27

The average cost of production falls as the firm gets larger

Answer 27

Economies of scale

Question 28

Monopoly based on the absence of other sellers in a certain geographic area

Answer 28

Geographic monopoly

Question 29

Monopoly based on ownership or control of a manufacturing method, process, or other scientific advance.

Answer 29

Technological monopoly

Question 30

Exclusive right to manufacture, use, or sell any new and useful invention for a specific period

Answer 30

Patent

Question 31

The exclusive right of authors or artists to publish, sell, or reproduce their work for their lifetime plus 50 years

Answer 31

Copyright

Question 32

A monopoly the government owns and operates

Answer 32

Government monopoly

Question 33

Monopolies are price makers or price takers?

Answer 33

Price makers, they choose the price.