Unit 2 Microeconomic Study Guide Part II

Use the diagram to answer the question.

What letter represents a monopoly?

• W

• X

• Y

• Z

For which of the following market structures can you find a large amount of “non-price competition”?

• monopoly

• oligopoly

• command economy

• perfect competition

In which market structure does a business have complete price control?

• monopoly

• oligopoly

• monopolistic competition

• perfect competition

Which type of market structure is characterized by the smallest number of firms?

• oligopoly

• monopoly

• pure competition

• monopolistic competition

Which of the following BEST describes a monopolistic market structure?

• a single seller and multiple buyers

• a single good and multiple sellers

• a single buyer and a single seller

• a single seller and a single good

Consumers are told that the consumption of cauliflower will significantly reduce the risk of cancer. Which of these scenarios is likely to happen in the cauliflower market?

• The demand curve will shift to the left and the price of cauliflower will fall

• The supply curve will shift to the right and the price of cauliflower will rise

• The supply curve will shift to the right and the price of cauliflower will fall

• The demand curve will shift to the right and the price of cauliflower will rise

Suppose that the government set the price of chocolate at $6 per pound. Which of the following statements best describes an effect of this price control?

• 1. There would be a surplus of 40 pounds of chocolate

• 1. Less chocolate would be demanded at $4 than at $6

• 1. Producers of chocolate would want the price set at $4

• 1. There would be a shortage of 20 pounds of chocolate

The Law of Demand says that

• if price goes up, the quantity demanded goes up

• if price goes down, the quantity supplied goes up

• if price goes down, the quantity demanded goes down

• if price goes down, the quantity demanded goes up

What happened?

• 1. Demand increased

• 1. Demand decreased

• 1. Supply Increased

• 1. Supply Decreased

What happened?

• Demand increased

• Demand decreased

• Supply increased

• Supply decreased