1.

Which of the following is a characteristic of a perfectly competitive firm?

A)

JorDawn cannot tell which farm the peaches came from because they all look alike.

B)

Donelli's Pizza was voted the best pizza in town by readers of the local newspaper.

C)

People who want to open a bank in Kansas must obtain a charter from the Comptroller of the Currency or the state. New banks are not permitted to enter the market if the business of existing banks will be hurt by their entry.

D)

Devin's new business software firm is spending a ton of money on research and development.

2.

In which of the following lists are market structures ordered from the highest number of sellers to the lowest?

A)

perfect competition, monopolistic competition, oligopoly, monopoly

B)

oligopoly, perfect competition, monopoly, monopolistic competition

C)

monopoly, monopolistic competition, perfect competition, oligopoly

D)

monopoly, oligopoly, monopolistic competition, perfect competition

3.

A handful of firms that exhibit mutually interdependent decision-making are characteristics of what type of market structure?

A)

perfect competition

B)

monopolistic competition

C)

oligopoly

D)

monopoly

4.

All of the following are necessary for perfect competition, EXCEPT:

A)

many buyers and sellers.

B)

differentiated products.

C)

no barriers to market entry or exit.

D)

no control over price.

5.

Which of the following characteristics is found in a perfectly competitive market?

A)

no close substitutes for the product

B)

mutually interdependent decisions

C)

no barriers to market entry or exit

D)

potential for long-run economic profit