QUIZ (GROUP OF DANTE)

1. Is a market situation where there is a large number of independent sellers offering identical products.
a. pure competition
b. monopolistic competition

2. Companies within the pure competition category have little control of price or distribution of products.
a. true
b. false

3. Pure competition is said to exist in a market where:

a. There is freedom of entry and exists of buyer and sellers
b. Products are not homogenous

4. In the sense of perfect competition is not only pure but also free from other perfection.
a. true
b. false

5. The essentials feature of pure competition is the presence of any monopoly element.
a. true
b. false

6. Pure competition involves

a. very few number
b. price takers

7._________ of independently acting sellers, e.g., farm product, stock market, foreign exchange market.
a. very large number
b. free entry and exit
8. Identical and homogeneous product.
a. product
b. standardized product

9. None of the sellers can ask for a higher price.

a. standardized product
b. price takers

10. New firms can freely enter and existing firms can freely leave the market.
a. free entry and exit
b. pure competition

11. It is generally believed that market structure influences the behavior and performance of agents with
in the market.
a. pure competition
b. purely competitive markets

12. Pure competition and Monopoly are at each end of the spectrum of markets.
a. true
b. false

13. Pure competition provides the benchmark that can be use to evaluate markets.
a. true
b. false

14. Which are not in the characteristics of pure competition?

a. few number of buyers and sellers
b. Homogenous products
15. There are a large number of buyers and sellers and no one can influence the price of the commodity.
a. true
b. false

16. refers to the “physical characteristics” of the product, such as colour size, etc. and to the
“environmental factors”, such as the location of the celler, credit facilities, etc.
a. homogenous product
b. heterogeneous product

17. In pure competition, the new firms are free to enter the industry and the existing firms are free to
leave the industry.
a. true
b. false

18. There are no restrictions as such on the entry and exit on the firms.
a. true
b. false

19. When the existing firms make excess profits in the short run, other firms are attracted by it and enter
the industry.
a. free entry
b. free entry and exit form industry

20. Economics is best described as the study of humans behaving in response to having only unlimited
resources to fulfill limited wants and needs.
a. true
b. false

21. This model provides a context in which to apply revenue and cost concepts developed in the previous
lecture.
a. monopolistic competition
b. Pure competition
22. Market economies are assumed to have many buyers and sellers, high competition and many
substitutes.
a. true
b. false

23. ___________characterize industries in which the supplier determines prices and high barriers prevent
any competitors from entering the market.
a. Monopolies
b. Oligopolies

24._____________ are industries with a few interdependent companies. Perfect competition represents an
economy with many businesses competing with one another for consumer interest and profits.
a. Monopolies
b. Oligopolies

25. The essentials feature of pure competition is the absence of any monopoly element.
a. true
b. false

26. In standardized product, as long as the price is the same, the consumers will not be indifferent about
which seller they buy the product from.
a. true
b. false

27. Which of the following are not best describes as price takers.
a. Competitive are price takers, they cannot affect the price, but adjust to it
b. they will sell at a lower price.

28. ______________are used as the benchmark to evaluate market performance.

a. purely competitive markets
b. Monopolistic markets
29. In pure competition, the products of all firms in the industries are heterogeneous.
a. true
b. false

30. This implies that the firm can sell any amount of the product at the prevailing price only.
a. heterogeneous product
b. homogeneous product

Answer key:

1. A 16. a

2. a 17. a

3. a 18. a

4. a 19. b

5. b 20. b

6. b 21. b

7. a 22. a

8. b 23. a

9. b 24. b

10. a 25. a

11. b 26. b

12. a 27. b

13. a 28. a

14. a 29. b

15. a 30. b