Unit 3 Test Review: Market Structures (E.16-E.28)

Which of the following best describes the difference between oligopoly and monopolistic competition?

• Oligopoly has a few large firms, while monopolistic competition has many small firms.

• Oligopoly has high barriers to entry, while monopolistic competition has low barriers to entry.

• Firms in an oligopoly have significant market power, while firms in monopolistic competition have limited market power.

• Oligopoly firms sell identical products, while monopolistic competition firms sell differentiated products.

What type of merger would it be if Chic Fil A were to merge with a company that raises and processes chickens?

A company makes furniture for doll houses and another company provides cleaning services to corporate offices. What type of merger would this be categorized?

• Vertical Merger

• Conglomerate Merger

• Hostile Takeover

• Horizontal Merger

When consumers face scarcity, they must make choices that involve what?

• Increasing their income

• Reducing their consumption

• Opportunity costs and tradeoffs

• Saving more money

• Producing more goods

Jaidyn and Matthew own a company making Hello Kitty school supplies marketed toward high school students. Katie and Emma also own a company making Hello Kitty school supplies marketed toward high school students. Neither company can afford to lower their prices any further or else they'll no longer earn a profit. In order to compete with Katie and Emma, Jaidyn and Matthew decide to market their company aggressively through social media. What is this type of competition called?

• Marketing

• Non-Price Competition

• Advertising

• Price Competition

What happens to an industry when the government deregulates it?

• The industry’s products or services become available to more people.

• The industry has no control over its decisions.

• The industry gains more control over its decisions.

• The industry’s products or services become scarcer.

Which of the following would NOT be a benefit of Multinational Corporations to developing countries?

• Producing jobs and products around the world.

• Are able to influence the culture and politics in countries in which they operate.

• Spread new technology across the globe.

In monopolistic competition, what happens when a firm begins to charge an excessive price for its product?

• The firm will most likely face lawsuits for price fixing.

• The government will regulate the price of the product.

• Consumers will boycott the product.

• Consumers will buy a rival firm’s product instead.

How are prices and output of goods in a monopoly different from the prices and output of goods in perfect competition?

• Output is low and prices are high.

• Output is the same, but prices are higher.

• Output is the same, but prices are lower.

• Output is high and prices are low.

Which market structure is easiest for a newcomer to enter?

• perfect competition

• All are easy to enter

• monopolistic