Question

1. For a market to occur, there must be:

1. A building such as a retail store.
2. Government oversight.
3. Third parties such as brokers and agents.
4. Buyers and sellers.
5. Perfect information.

2. The law of diminishing marginal returns means that, as you increase the number of units of a variable input, after some point:

1. Marginal output will fall.
2. Total output will fall.
3. Costs of production will fall.
4. Demand will fall.
5. Supply will fall.

3. Which set of characteristics best identifies an oligopoly market?

1. Many firms, homogeneous product, significant barriers to entry, significant non-price competition, and considerable power over price.
2. Few firms, differentiated product, no barriers to entry, the absence of non-price competition, and considerable advertising.
3. One firm producing a product with no close substitutes, significant barriers to entry, and considerable power over price.
4. Many firms, differential product, few barriers to entry, and non-price competition.
5. Few firms, differentiated product, significant barriers to entry, and significant amounts of non-price competition.

4. An oligopolistic market is one with:

1. Firms having no power over price.
2. Few buyers.
3. Few sellers.
4. Product groups.
5. Several monopolists operating simultaneously.

5. How many sellers constitute a monopoly market?

1. 1.
2. 2 or 3.
3. 4 or 5.
4. More than 5.
5. Many.

Answer 1

1.

d) Buyers and sellers. Market is a place where transactions take place between buyers and sellers to buy and sell goods or services.

2.

a) Marginal output will fall. The law of diminishing marginal returns states that if one factor of production is increased keeping other factors of production constant, the marginal output will start to diminish.

3, e. There are few sellers whose behavior depends on the action of the other firms. Non-price competition plays an important role.

4. c. Few sellers operate in an oligopoly market.

5. a) In monopoly there is only one seller.