Market structure is defined as the:
a. number of firms in each industry.
b. similarity of the product sold.
c. ease of entry into and exit from the market.
d. all of these.
QUESTION 2Demand sensitivity depends on all of the following except:
a. how low is the price of the good.
b. the sensitivity of firms' output to changes in its price.
c. the consumer's income.
d. the availability and closeness of substitutes.
e. the amount of time a consumer has to adjust to price changes.
QUESTION 3Which of the following is not a characteristic of the structure of perfectly competitive markets?
a. Each individual firm is small in size relative to the overall market.
b. Few sellers.
c. Homogeneous product.
d. Easy, low cost entry and exit.
QUESTION 4The longer the time period under study,
a. the more elastic is the price elasticity of demand.
b. the less sensitive consumers will be to price changes.
c. the less adjustment consumers will make to price changes.
d. the more inelastic is the price elasticity of demand.
e. the more likely any given price cut will result in a smaller reaction by the consumer.
QUESTION 5A product would be more demand price inelastic:
a. the shorter the time the consumer has to adjust to price changes.
b. the higher the price of the good.
c. the more the number of good substitutes.
d. the less the essential nature of the good.
e. if the supply is more price elastic.
QUESTION 6A product would be more demand price elastic:
a. the shorter the time the consumer has to adjust to price changes.
b. the lower the price of the good.
c. the fewer the number of good substitutes.
d. the less the essential nature of the good.
e. if the supply is more price elastic.
QUESTION 7Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if:
a. people spend a large share of their income on the product.
b. people spend an insignificant share of their income on the product.
c. the population in the market area is large.
d. there are many good substitutes for the product.
QUESTION 8Which of the following factors is associated with products with a highly price elastic demand?
a. Few close substitutes.
b. A very short time period for consumers to respond to price changes.
c. Many very close substitutes.
d. A per unit price that is only a very small portion of most peoples' budgets.
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