#1
In a perfectly competitive market, what happens if a firm charges a price above the market equilibrium?
It attracts more customers.
It loses customers to other firms.
It maintains its market share.
It increases its profit margin.
#2
What is a characteristic of a perfectly competitive market?
Firms have market power.
Products are differentiated.
There are many buyers and sellers.
Entry and exit are restricted.
#3
What is the main assumption of perfect competition?
Homogeneous products
Monopolistic control
High barriers to entry
Product differentiation
#4
Which factor contributes to market efficiency in a competitive economy?
Government intervention
Barriers to entry
Information availability
Monopoly power
#5
What is the role of competition in a market economy?
To decrease efficiency
To increase prices
To encourage innovation and lower prices
To limit consumer choices
#6
Which type of market structure has the highest level of competition?
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
#7
What is the primary goal of firms operating in a competitive market?
Maximizing social welfare
Minimizing consumer surplus
Maximizing profit
Minimizing production costs
#8
Which concept implies that market prices reflect all available information?
Market equilibrium
Market efficiency
Price discrimination
Monopolistic competition
#9
What is the efficient market hypothesis (EMH)?
It suggests that market prices always reflect the true value of assets.
It states that market prices may not accurately reflect all available information.
It proposes that market prices are determined solely by supply and demand.
It argues that market prices are influenced by irrational investor behavior.
#10
What is a characteristic of monopolistic competition?
Many sellers, differentiated products
Few sellers, identical products
One seller, unique product
Few sellers, differentiated products
#11
What does the term 'price discrimination' refer to?
Selling identical products at different prices to different consumers
Maintaining a single price for all consumers
Regulating prices by government authorities
Setting prices based on production costs
#12
What is a characteristic of oligopoly?
Many firms selling similar products
Few firms selling identical products
One firm selling a unique product
Many firms selling differentiated products
#13
Which factor can lead to market inefficiency?
Perfect information
Government regulation
Increased competition
Decreased consumer demand
#14
What is a feature of a monopolistic competition market structure?
Homogeneous products
Many firms selling identical products
Few firms selling differentiated products
One firm selling a unique product
#15
Which form of market efficiency implies that past prices and information cannot be used to consistently outperform the market?
Weak form efficiency
Semi-strong form efficiency
Strong form efficiency
Perfect form efficiency
#16
Which of the following is NOT a condition for market efficiency according to the efficient market hypothesis?
Investors are rational
There are no transaction costs
Information is freely available
There are no taxes on investments
#17
What does the term 'arbitrage' mean in the context of market efficiency?
Buying and selling securities to exploit price discrepancies
Speculating on future price movements
Investing in high-risk assets
Short-selling stocks to profit from market downturns
#18
Which type of market efficiency suggests that all public information is reflected in asset prices?
Weak form efficiency
Semi-strong form efficiency
Strong form efficiency
Perfect form efficiency
#19
What is the concept that suggests that markets are not always efficient and may fail to allocate resources optimally?
Market equilibrium
Market failure
Market efficiency
Market intervention