Republic of the Philippines

Department of Education
REGION IV-A - CALABARZON
SCHOOLS DIVISION OF BIÑAN CITY
SAINT FRANCIS NATIONAL HIGH SCHOOL
TUKLAS St. Brgy. SAN FRANCISCO, BIÑAN CITY, LAGUNA

ACTIVITY 1 (APPLIED ECONOMICS 12)

Multiple Choice: Select the letter of the correct answer and write it in your answer sheet.

1. Which of the following market structures is characterized by many small firms, each selling a
differentiated product?
A. Perfect competition. C. Oligopoly
B. Monopolistic competition. D. Monopoly
2. Which of the following market structures is characterized by a single firm with no close
substitutes for its product?
A. Perfect competition C. Oligopoly
B. Monopolistic competition D. Monopoly
3. In which market structure do firms have the greatest control over pricing?
A. Perfect competition. C. Oligopoly
B. Monopolistic competition. D. Monopoly
4. How does the ease of entry into a market affect the market structure?
A. Markets with easy entry tend to have more firms and are more competitive.
B. Markets with easy entry tend to have fewer firms and less competition.
C. Markets with easy entry tend to have a mix of different market structures.
D. The ease of entry has no effect on market structure.
5. How does the presence of barriers to entry affect market structure?
A. It makes it more likely that the market will be characterized by perfect competition.
B. It makes it more likely that the market will be characterized by monopolistic competition.
C. It makes it more likely that the market will be characterized by oligopoly or monopoly.
D. It has no effect on market structure.
6. What is the difference between a monopolistic competition market and an oligopoly market?
A. Number of sellers in the market. C. Barriers to entry in the market
B. Type of product sold in the market. D. Pricing power of firms in the market
7. What is the impact of a decrease in the number of firms in an oligopoly market?
A. It increases competition in the market. C. It has no effect on competition in the market.
B. It decreases competition in the market. D. It depends on the type of product being sold.
8. Which of the following is not a characteristic of perfect competition?
A. Determine many sellers C. Barriers to entry.
B. Homogeneous products D. No pricing power.
9. What will be the result of monopolistic competition in the highest level of innovation and product
development?
A. The presence of many companies
B. Each company produces similar but differentiated products.
C. Companies are not price takers.
D. All the above
10.As a government official, how would you address a situation where a market is characterized by
a monopoly?
A. Allow the market to operate without any intervention.
B. Break up the monopoly into smaller firms.
C. Implement price controls to limit the pricing power of the monopoly.
D. Provide subsidies to smaller firms to increase competition in the market.