Demand, Supply, and Perfectly Competitive Market

 Demand, supply, and a perfectly competitive market

A fully competitive market is a concept in which there are numerous buyers and sellers, all of whom have perfect knowledge of the market, and no obstacles to entry or exit exist. There are no transaction costs in such a market because all commodities are equal.

Demand, Supply, and Perfectly Competitive Market

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1. Choose the best characteristic of a perfectly competitive market?

A) Barriers to entry

B) A small number of firms

C) Differentiated products

D) Price takers

Answer: D) Price takers{alertSuccess}

2. Which of the subsequent is an example of a public good?

A) A restaurant meal

B) A movie ticket

C) A fireworks display

D) A car

Answer: C) A fireworks display{alertSuccess}

3. Choose the correct option of a positive externality?

A) Pollution

B) Noise pollution

C) Vaccinations

D) Congestion

Answer: C) Vaccinations{alertSuccess}

3. Why the demand curve for a normal good is slop downward?

A) Price and quantity demanded to have a negative relationship

B) Price and demand are positively correlated.

C) Price and quantity demanded do not correlate with one another.

D) None of the above

Answer: A) There is a negative relationship between price and quantity demanded{alertSuccess}

4. The factor of production?

A) Land

B) Labor

C) Capital

D) All of the Above

Answer: D) All of the Above{alertSuccess}

5. Chose the correct example of a fixed cost?

A) Wages paid to workers

B) The cost of raw materials

C) Rent for a factory

D) The Elastic cost is used in production

Answer: C) Rent for a factory{alertSuccess}

6. Choose the right answer for a perfectly elastic demand curve?

A) The demand for water

B) The demand for diamonds

C) The demand for luxury cars

D) The demand for food

Answer: A) The demand for water{alertSuccess}

7. What is a price ceiling?

A) It is a legal minimum price that can be charged for a good or service

B) It is a legal maximum price that can be charged for a good or service

C) It creates a shortage of goods or service

D) All of the above

Answer: B) It is a legal maximum price that can be charged for a good or service{alertSuccess}

8. Choose the right option for the price floor?

A) It is a legal minimum price that can be charged for a good or service

B) It is a legal maximum price that can be charged for a good or service

C) It creates a surplus of the good or service

D) All of the above

Answer: A) It is a legal minimum price that can be charged for a good or service{alertSuccess}

9. Correct option of a monopolistic competitive market?

A) The market for wheat

B) The market for diamonds

C) The market for fast food restaurants

D) The market for prescription drugs

Answer: C) The market for fast food restaurants{alertSuccess}

10. Best example of a cartel?

A) OPEC

B) The United Nations

C) The World Trade Organization

D) The International Monetary Fund

Answer: A) OPEC{alertSuccess}

11. Best option of a natural monopoly?

A) A local cable television provider

B) A small grocery store

C) A gas station

D) A local coffee shop

Answer: A) A local cable television provider{alertSuccess}

12. Choose the right option for non-excludable goods?

A) A restaurant meal

B) A movie ticket

C) Clean air

D) A private jet

Answer: C) Clean air{alertSuccess}