Economics

Question 1

What are the types of economies?

Answer 1

• Planned Economies = Communism
• Mixed economies = socialism
• Free market= Capitalism

Question 2

What is communism?

Answer 2

Allocation of factors of production determined by the government

Question 3

What is Capitalism?

Answer 3

Supply/demand based and determined by the market

Question 4

What are the rights of free market?

Answer 4

• The right to own a business
  and keep after-tax profits.
• The right to own private
  property
• The right to freedom of
  choice regarding employment,
  spending, etc.
• The right to fair competition

Question 5

What are the levels of competition?

Answer 5

• Pure Competition
• Monopolistic
  Competition
• Oligopoly
• Monopoly

Question 6

The levels of competitions is organized by ?

Answer 6

• The less concentrate to the more concentrate
• The more competition to the les competition

Question 7

What is pure competition?

Answer 7

Many sellers of a basically identical or homogenous product or
commodity; sellers have no control over the price which is set by supply and
demand; the many buyers will purchase from the lowest price source; there is no
differentiation of products; barriers to entry are low; few markets meet these criteria
as it is more of a theoretical case.

Question 8

What is monopolistic competition?

Answer 8

Many sellers of products that may be seen as different
in terms of physical characteristics, quality, brand, service or distribution method
by some buyers thereby allowing a firm with a differentiated brand some control
over pricing; barriers to entry are relatively low.

Question 9

What is oligopoly ?

Answer 9

A few large suppliers dominate and control the market; there are high
barriers to entry in terms of financial investment, infrastructure or technological
expertise; depending on the industry, the products can be similar or slightly
different; since competition is limited, intense price competition is usually
avoided.

Question 10

Monopoly is ?

Answer 10

One producer and source of supply with a unique product, that
therefore has complete control over the price since there are no competitors; to counteract this, government often regulates the price; also includes natural
monopolies which are a sub-set.