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Flashcards in Chapter 7- Section 1 Deck (34):
0

The philosophy that government should not interfere with commerce or trade

Laissez-Faire

1

Refers to the supply side of the market, or all producers collectively

Industry

2

The nature and degree of competition among firms operating in the same industry

Market structure

3

A large number of well-informed independent buyers and sellers who exchange identical products

Perfect Competition

4

Large number of buyers and sellers, no single buyer or seller large enough to affect the price

First condition of prefect competition

5

Buyers and sellers deal in identical products with no difference in quality

Second condition of perfect competition

6

Each buyer and seller act independently, ensuring buyers compete against one another for the buyers dollar and buyers compete to find the best price

Third condition of perfect competition

7

Buyers and sellers are reasonably well informed about products and prices.

Fourth condition of perfect competition

8

Buyers and sellers free to enter into, conduct, or get out of business

Fifth condition of perfect competition

9

What sets the equilibrium price in a perfect competition?

Supply and demand

10

A market structure that lacks one or more of the conditions of perfect competition.

Imperfect Competition

11

The market structure that has all the conditions of perfect competition except for identical products

Monopolistic Competition

12

Real or imagined differences between competing products in the same industry

Product Differenitiation

13

The use of advertising, giveaways, or other promotional campaigns to convince buyers that the product is somehow better than another brands

Nonprice Competition

14

Changing the view of the product in the mind of the buyer

Differentiate

15

Monopolistic competition is easy to enter into. True or false?

True.

16

Market structure in which a few very large sellers dominate the industry

Oligopoly

17

Because oligopolistic structures are so large, ....

When one firm acts the other firms usually follow.

18

A formal agreement to set prices or to otherwise behave in a cooperative manner

Collusion

19

Agreeing to charge the same or similar prices for a product

Price-fixing

20

Are collisions against the law?

Yes, they restrain trade.

21

What is a price war?

A series of price cuts that result in unusually low prices

22

Easy to enter into an oligopoly. True or false?

False, it is very difficult.

23

Market structure with only one seller of a particular product

Monopoly

24

Local telephone companies, cable TV, and utilities are examples of?

Monopolies

25

Market situation where the costs of production are minimized by having a single firm produce the product

Natural monopoly

26

The exclusive right to do business in a certain area without competition

Franchise

27

The average cost of production falls as the firm gets larger

Economies of scale

28

Monopoly based on the absence of other sellers in a certain geographic area

Geographic monopoly

29

Monopoly based on ownership or control of a manufacturing method, process, or other scientific advance.

Technological monopoly

30

Exclusive right to manufacture, use, or sell any new and useful invention for a specific period

Patent

31

The exclusive right of authors or artists to publish, sell, or reproduce their work for their lifetime plus 50 years

Copyright

32

A monopoly the government owns and operates

Government monopoly

33

Monopolies are price makers or price takers?

Price makers, they choose the price.