#1
Which market structure is characterized by a large number of buyers and sellers, homogeneous products, and ease of entry and exit?
Perfect Competition
Monopoly
Oligopoly
Monopolistic Competition
#2
In which market structure do a few large firms dominate the market, and there are barriers to entry for new firms?
Perfect Competition
Oligopoly
Monopolistic Competition
Monopoly
#3
In a perfectly competitive market, what is the shape of the demand curve faced by an individual firm?
Vertical
Downward-sloping
Horizontal
Upward-sloping
#4
What is the key characteristic of a monopoly market structure?
Many sellers
Homogeneous products
Single seller
Perfect information
#5
In a perfectly competitive market, what is the relationship between marginal revenue and price?
Marginal revenue equals price
Marginal revenue is greater than price
Marginal revenue is less than price
Marginal revenue is unrelated to price
#6
What is a distinguishing feature of a monopolistic competition market structure?
Identical products
High entry barriers
Many sellers
Perfect information
#7
What is an externality in economics?
A situation where the supply exceeds demand
The unintended side effects of economic activities affecting third parties
A situation where there is a shortage of goods
The equilibrium point in a market
#8
Which market structure is characterized by a few firms producing similar but not identical products, and there is product differentiation?
Perfect Competition
Oligopoly
Monopoly
Monopolistic Competition
#9
Which of the following is a characteristic of a natural monopoly?
Many firms producing identical products
High entry barriers
Perfect information
Low production costs
#10
What is the primary goal of antitrust laws in the context of market structures?
To promote collusion among firms
To prevent market competition
To encourage monopolies
To promote fair competition and prevent anticompetitive behavior
#11
In a monopolistic competition, what role does product differentiation play?
It is not relevant
It leads to identical products
It reduces competition
It allows firms to distinguish their products
#12
What is the tragedy of the commons in the context of externalities?
The overuse and depletion of a shared resource
Government intervention in the market
Efficient allocation of resources
Perfect competition
#13
What is a key feature of a contestable market?
High entry barriers
Low exit barriers
Ease of entry and exit
Government regulation
#14
What is the tragedy of the commons?
A situation where there is an overproduction of goods
A situation where a common resource is overused and depleted due to individual self-interest
A situation where there is a surplus of goods
The equilibrium point in a market
#15
In an oligopoly, firms often engage in strategic behavior, which refers to:
Cooperative agreements to set prices
Competing solely on price
Making decisions without considering competitors
Actions taken to influence rivals' behavior
#16
How do positive externalities impact the efficiency of a market?
They lead to overproduction
They lead to underproduction
They have no impact on efficiency
They improve efficiency
#17
Which market structure exhibits interdependence among firms in decision-making?
Monopoly
Perfect competition
Monopolistic competition
Oligopoly
#18
What is a Pigovian tax used to address in the context of externalities?
To encourage production
To discourage consumption
To promote competition
To subsidize businesses
#19
In an oligopoly, what is the term used to describe a situation where firms mimic each other's pricing and output decisions?
Collusion
Cartel
Price leadership
Game theory
#20
How does a subsidy address a negative externality in the market?
By encouraging more production
By discouraging consumption
By internalizing the externality
By increasing government revenue