PART 2

Question 1

TRUE OR FALSE: In economic analysis, the main concern is to realize the maximum profit.

Answer 1

True

Question 2

The gap or difference between revenue and cost

Answer 2

Profit

Question 3

TRUE OR FALSE: One Seller = High Profit

Answer 3

True

Question 4

TRUE OR FALSE: Limited Market Power = Minimal Profit

Answer 4

False (Medium Profit)

Question 5

TRUE OR FALSE: Perfect Competition = High Profit

Answer 5

False (Minimal Profit)

Question 6

TRUE OR FALSE: Highly Differentiated Product = High Profit

Answer 6

True

Question 7

TRUE OR FASLE: Monopoly = High Profit

Answer 7

True

Question 8

TRUE OR FALSE: Monopolistic Competition = Minimal Profit

Answer 8

False (Medium Profit)

Question 9

TRUE OR FALSE: No Market Power = Minimal Profit

Answer 9

True

Question 10

TRUE OR FALSE: Scale and Legal Barriers, Gov’t Barriers = High Profit

Answer 10

True

Question 11

Refers to the number of sellers and buyers in the market.

Answer 11

Market Concentration

Question 12

TRUE OR FALSE: The more concentrated the market, the more producers are there in the industry.

Answer 12

FALSE

Question 13

Refers to inherent features of the industry and the various means devised in the market to prevent the entry of potential players and competitors that want to take advantage of the enormous profit in industry

Answer 13

Barriers to Entry

Question 14

Two Categories of Market Barriers

Answer 14

Scale Barriers and Legal Barriers

Question 15

Refers to requirements for a large production plants for a feasible operation in the industry

Answer 15

Scale Barriers

Question 16

Refer to proprietary rights and their corresponding legal protection extended to existing market players in the production and distribution of a product or service

Answer 16

Legal Barriers

Question 17

This factor refers to the ability of a business firm to create a market niche through several means of varying its products and services.

Answer 17

Product Differentiation

Question 18

This element refers to the unevenness in the distribution of information among the actors in the market

Answer 18

Limited Information

Question 19

There are many sellers, none of which controls the prices and output of the whole industry

Answer 19

Pure Competition

Question 20

There is only one seller who represents the whole industry.

Answer 20

Pure Monopoly

Question 21

There is only one product or service with no substitutes

Answer 21

Pure Monopoly

Question 22

Due to severe barriers to entry no other entities can compete in the market

Answer 22

Pure Monopoly

Question 23

There are a few sellers of differentiated products with strict barriers to entry.

Answer 23

Oligopoly

Question 24

There are many sellers with unique products, each trying to gain a competitive advantage

Answer 24

Monopolistic Competition

Question 25

Two forms of barriers to entry

Answer 25

Industry Barrier and Government Intervention

Question 26

Initial capitalization of a business is very expensive

Answer 26

Industry Barrier

Question 27

Licenses are difficult to secure or taxes are very high.

Answer 27

Government Intervention

Question 28

TRUE OR FALSE: Industry Barrier and Government Intervention are both present in pure competition.

Answer 28

False

Question 29

It refers to the type of customers and their number as well.

Answer 29

Market

Question 30

TRUE OR FALSE: Knowing and understanding your customers are essential to identify the service or good to present to the market

Answer 30

TRUE

Question 31

It refers to categorizing your customers according to demographic and geographic groups.

Answer 31

Market Segmentation

Question 32

This describes the kind of customers you have in terms of gender, age, and income.

Answer 32

Demographics

Question 33

refers to belonging to a certain place

Answer 33

Geographic Segment

Question 34

Defined as the source of materials used in production by a producer, a seller, or a manufacturer.

Answer 34

Supplier

Question 35

Goods that can replace other goods because of similarities, appearances, use, among others.

Answer 35

Substitutes