Unit 3 - Market Structures Review

A Chinese automobile manufacturer announces new models. The new vehicles are expected to go on sale next Fall in Europe and North America. Which factor explains how this development is likely to affect U.S. automobile markets?

• Increased demand for a product will cause prices to rise

• More intense competition will reduce the quality of goods

• Improvements in technology will enhance reliability

• Expanded customer choice will drive down prices

Productivity of labor is not a factor that affects wage levels

• True

• False

One way companies distinguish themselves from competitors is by

• Improving safety standards for workers

• Promoting different products

• Increasing production possibilities

• Supporting antitrust legislation

Why would the United States seek to limit the development of business monopolies?

• To guarantee low prices

• To encourage competition

• To increase production levels

• To improve hiring practices

In a market economy, the strongest incentive for entrepreneurship is the opportunity to

• Earn a profit on investment

• Support projects for the public good

• Gain personal prestige and fame

• Determine regulatory and tax policies

Provide two examples of products that are essentially the same no matter who sells them and are sold under the conditions of perfect competition.

What best defines the financial gain received by selling something for more than it costs to make/produce it?

• Market

• Money

• Corporation

• Profit

Which of the following is the MOST ACCURATE summary of this line graph?

• Overall, deregulation of the airlines has led to higher ticket prices

• Airline ticket prices decreased the most during the first year of deregulation

• Overall, deregulation of the airlines has led to lower ticket prices

• Airline ticket prices decreased the most during the period 2009–2012

Which characteristic describes a disadvantage of a sole proprietorship?

• Increased regulation

• Unlimited personal liability

• Double taxation

• Less investor control

Why does the government enforce antitrust laws?

• To ensure the development of public goods and services

• To develop large-scale efficient industries

• To ensure competition in the marketplace

• To create incentives for research and development