Multichoice questions

Perfectly Competitive Markets 1) A price taker is A) a firm that accepts different prices from different customers. B) a consumer who accepts different prices from different firms. C) a perfectly competitive firm. D) a firm that cannot influence the market price. E) both C and D 2) Which of following is an example of a homogeneous product? A) Gasoline B) Copper C) Personal computers D) Winter parkas E) both A and B 3) Which of the following is a key assumption of a perfectly competitive market? A) Firms can influence the market price. B) Commodities have few sellers. C) It is difficult for new sellers to enter the market. D) Each seller has a very small share of the market. E) none of the above 4) Several years ago, Alcoa was effectively the sole seller of aluminum because the firm owned nearly all of the aluminum ore reserves in the world. This market was not perfectly competitive because this situation violated the: A) price-taking assumption. B) homogeneous product assumption. C) free entry assumption. D) A and B are correct. E) A and C are correct. 5) Use the following statements to answer this question: I. Markets that have only a few sellers cannot be highly competitive. II. Markets with many sellers are always perfectly competitive. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false. 6) Firms often use patent rights as a: A) barrier to exit. B) barrier to entry. C) way to achieve perfect competition. D) none of the above