AnswersTX-Economics Chamberlain P4 T1Elasticity and Incentives

Market Structures and Competition Answers

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1
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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.
2
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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
4

Who sets the price in a monopolistic competition?

A
producers and consumers
B
consumers only
C
government
D
producers only
5

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
6

In pure competition, producers compete exclusively on the basis of

A
selling identical items.
B
advertising heavily to promote their good.
C
producing the unique features of their good.
D
focusing on maintaining a positive image.
7

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.
8

If consumer sovereignty is considered greatest in a system of pure competition, why is sovereignty still limited?

A
Consumers still rely on producers’ set prices.
B
Few products are actually sold on the basis of pure competition.
C
Choices are driven by price when goods are identical.
D
Limited price variations restrict actual choice.
10

Which best describes the availability of substitutes in a monopoly?

A
Price points vary.
B
There are no substitutes.
C
There are different brands.
D
Products have different features.

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