Vocab
A type of market in which a few sellers dominate an industry.
Oligopoly
Markets can sometimes fail.
True
What is the term used for a group of firms producing similar or identical products?
Industry
Why does the market not supply public goods?
There is no profit to be made by producing them.
If your parents own a home or property, they most likely pay this every month.
Mortgage
Public goods are things like highways, police departments, and fire departments.
True
What is the idea called that believes government should not interfere with business activity?
Laissez-Faire
What are two of the main causes of market failure?
Inadequate competition, not enough information, resources can't or won't move, too few public goods, Externalities or spillover effects
Occurs when a flaw prevents an efficient allocation of resources.
Market Failure
Public disclosures allows business to keep information about its products or its operations secret to the public.
False, it requires businesses to reveal this info
What is it called when someone is selling the same product to different consumers at different prices?
Price Discrimination
What is another term that can now be applied to the U.S economic system?
Modified Free Enterprise
This is a cost or benefit of an economic activity experienced by an unrelated third party.
Externality
Price fixing is a legal agreement by companies to charge a uniform price for a product.
False, its illegal
What is the effect of a company in an oligopoly making a product change?
The other companies in the oligopoly will make the same change.
What role does advertising play in monopolistic competition?
Advertising is used to differentiate one product from all others to attract consumers.
UPPCO, Semco, and Spectrum would be examples of this.
Monopoly
Pure competition and monopoly are nearly identical.
False, they are opposites
This is a regulation that occurs at the local level and is a way of controlling land use. It is in effect almost everywhere.
Zoning
What does the FTC stand for and what does it have the authority to do?
Federal Trade Commission and they can issue cease and desist orders.