AnswersAA - F26 Personal Finance and EconomicsMarket Structures and Competition

Business Structures Answers

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SovereigntyCompetitionOligopoly

A
Sovereignty
B
Competition
C
Oligopoly
2
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Natural monopolies occur when one producer

A
can meet the market’s entire demand.
B
controls the method of production.
C
is the only one authorized to produce a given product.
D
creates unique products.
3

Why is the automobile industry considered an oligopoly? Select all that apply.It offers little differentiation within the market.It has significant barriers to entry.It is controlled by companies that patent key technology.It relies on price variation to attract customers.It depends on brand loyalty and image to generate sales.It is dominated by a few key players.

A
It offers little differentiation within the market.
B
It has significant barriers to entry.
C
It is controlled by companies that patent key technology.
D
It relies on price variation to attract customers.
E
It depends on brand loyalty and image to generate sales.
F
It is dominated by a few key players.
4

Which best describes how the government sanctions technological monopolies?

A
by creating the technology itself
B
by prohibiting others from entering the market
C
by issuing a patent for the technology
D
by authorizing one producer
5

Which helps enable an oligopoly to form within a market?

A
Costs of starting a competing business are too high.
B
The government restricts market entry.
C
The number of options in a market confuses consumers.
D
No competition exists between producers.
6

The lack of competition within a monopoly means that

A
offered goods and services are lackluster.
B
the product’s market is small.
C
consumers must look elsewhere to find options.
D
monopolists set their own price.
7

Which best describes how the government enables government monopolies to exist?

A
by issuing a patent
B
by allowing natural monopolies to exist
C
by creating and running a monopoly
D
by owning the means of production
8

Which aspect of monopolistic competition gives consumers more choice?

A
Producers rely on consumer decisions to succeed.
B
Price is not an important factor.
C
Few barriers to market entry exist.
D
Producers are more concerned about selection than profits.
9

Which is an example of a government monopoly in the United States?

A
the US Postal Service
B
the Internal Revenue Service (IRS)
C
the US Environmental Protection Agency (EPA)
D
the National Park Service
10

When an oligopoly exists, how many producers dominate the market?

A
none
B
one
C
a few
D
many

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