Econ- Chapter 8 And 9 Question Preview (ID: 60240)


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When two or more companies in the same business combine into one corporation, the transaction is known as:
a) Joint venture
b) Vertical merger
c) Horizontal merger
d) Conglomerate merger

A merger that controls all steps in the production process is known as:
a) Joint venture
b) Horizontal merger
c) Vertical merger
d) Conglomerate merger

In a perfectly competitive market, prices are determined by:
a) The Government
b) A group of seller
c) Government regulations
d) Supply and demand

Government regulations actually decrease competition in the economy by:
a) Allowing foreign companies to compete in the U.S.
b) Using antitrust legislation against monopolies
c) Preventing the formation of conglomerates
d) Trying to protect consumers from unfair practices

One advantage of an oligopoly is:
a) More stable prices
b) Lower prices per product
c) Fewer product offerings
d) Better services

Nonprice competition is a characteristic of both:
a) Monopolistic competition and oligopoly
b) Perfect competition and pure monopoly
c) Oligopoly and perfect competition
d) Monopolistic competition and pure monoploy

What is the main purpose of advertising in monopolistic competition?
a) Lowering prices among competitors
b) Informing consumers that there are no other choices
c) Building brand loyalty
d) Showing how similar a product is to its competitors

Natural monopolies are businesses that:
a) Deal with natural resources
b) Compete against other monopolies
c) Are unregulated
d) Provide such things as utilities, public transportation and cable TV

In a perfectly competitive market, there would be:
a) Guaranteed profitablity
b) Strict control over price
c) Many barriers to entry
d) Numerous buyers and sellers

Interlocking directorates occur when the boards of directors of competing companies:
a) Buy out similar firms in their industry
b) Sell their companies to one another
c) Are composed of many of the same members
d) Obtain a monopoly in a particular industry

An example of antitrust legislation is the:
a) American with Disabilities Act
b) Clayton Act
c) Wade Act
d) Truth in Lending Act

This federal regulatory agency regulates the workplace environment; makes sure that businesses provide workers with safe and healthful working conditions:
a) Equal Employment Opportunity Commission
b) Occupational Safety and Health Administration
c) Environmental Protection Agency
d) Nuclear Regulatory Agency

a merger between firms that are involved in totally unrelated business activities:
a) Joint venture
b) Horizontal merger
c) Vertical merger
d) Conglomerate merger

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