Unit 1 Market Price Mechanism Quiz Januar 17

Unit 1 Market & Price Mechanism Quiz ( Januar 17, 2017)

1. The study of how firms, nations, and individuals best allocate their limited resources is called what? A. Circular Economic Activity B. Economics C. Factoring Production D. Supply and Demand Analysis

B. Economics

2. Which of the following is not a type of market structure? A. B. C. D. Competitive monopoly Oligopoly Perfect competition All of the above are types of market structures.

A. Competitive monopoly

3. Which of the following types of firms is likely to be a monopolistic competitor? A. A local telephone company B. An automobile manufacturer C. A restaurant D. All of the above are likely to be monopolistic competitors.

C. A restaurant

4. Which of the following is NOT a characteristic of monopolistic competition? A. B. C. D. Few sellers A differentiated product Easy entry into and exit from the industry All of the above are characteristics of monopolistic competition

A. Few sellers.

5. If a firm sells its output on a market that is characterized by a single seller and many buyers of a identical product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is A. a monopolist B. an oligopolist C. a perfect competitor D. a monopolistic competitor

A. a monopolist

6. Which of the following is NOT a true statement? 1. A shortage can never happen unless there is a surplus. 2. A market economy will eventually reach equilibrium. 3. Supply is determined by how much product a producer can sell to the public. 4. All the changes made to the supply and demand in a market in a certain time period.

1. A shortage can never happen unless there is a surplus.

7. When there is surplus of goods and services; demand is less than supply what happens to the price? 1. 2. 3. 4. price will go up. price will go down. equilibrium price will not change.

2. price will go down.

8. What an economist call when there is amount supplied equals the amount demanded? 1. increase of product 2. decrease of product 3. market equilibrium 4. price equilibrium

3. market equilibrium