SURVEY OF ECONOMICS- QUESTIONS AND
ANSWERS GRADED A+ 2025/2026
1) What is the characteristic of a perfectly competitive firm that causes it to be a price taker?
A) many buyers and sellers
B) homogeneous product
C) free entry and exit
D) A and B are correct.
Correct answerD
2) Which of the following is NOT a characteristic of a perfectly competitive market?
A) a large number of firms in a market
B) selling a standardized product
C) substantial barriers to entry
D) an individual firm having no control over price
Correct answerC
3) Which of the following is NOT a characteristic of a perfectly competitive market?
A) a small number of firms in a market
B) selling a standardized product
C) no barriers to entry
D) an individual firm having no control over price
Correct answerA
4) Which of the following is a characteristic of a perfectly competitive market?
A) a large number of firms in a market
B) selling a standardized product
C) no barriers to entry
D) all of the above
Correct answerD
5) Consumers do not have a strong preference for the output of one seller over that of another in
a perfectly competitive market because:
A) there a large number of firms in the market.
B) the firms sell a standardized product.
C) there are no barriers to entry.
D) an individual firm has control over price.
Correct answerB
6) A perfectly competitive market:
A) is dominated by one firm.
B) consists of at most five firms.
C) is made up of a large number of firms.
D) consists of only one firm.
Correct answerC
7) Who are the price takers in a perfectly competitive market?
A) both the buyers and the sellers
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,B) the buyers
C) neither the buyers nor the sellers
D) the sellers
Correct answerA
8) A price taker is a buyer or a seller who:
A) takes the market price as given.
B) buys or sells only at a price where profits can be made.
C) accepts whatever price that the government legislates as the price of the good or service.
D) has the ability to influence the equilibrium price in the market.
Correct answerA
9) A price maker is a buyer or a seller who:
A) takes the market price as given.
B) buys or sells only at a price where profits can be made.
C) accepts whatever price that the government legislates as the price of the good or service.
D) has the ability to influence the equilibrium price in the market.
Correct answerD
10) Firms in a perfectly competitive market:
A) sell a differentiated product.
B) sell homogeneous products.
C) usually have large advertising budgets.
D) try to attract customers away from their competitors.
Correct answerB
11) A market in which firms sell a homogeneous product and cannot influence market price is
most likely:
A) a perfectly competitive market.
B) an oligopoly.
C) a monopolistically competitive market.
D) a monopoly market.
Correct answerA
12) In a market for a homogeneous good, if sellers and buyers can enter or exit a market freely ,
the market is most likely:
A) an oligopoly.
B) a monopolistically competitive market.
C) a monopoly.
D) a perfectly competitive market.
Correct answerD
13) Which of the following statements about a perfectly competitive market is INCORRECT?
A) There are many sellers, each supplying a small quantity.
B) There are many buyers, each purchasing a small quantity.
C) The market sell homogeneous products.
D) Buyers and sellers cannot enter exit the market freely.
Correct answerD
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,14) Which of the following is the best example of a perfectly competitive firm?
A) DeBeers Diamond Company
B) your local cable T.V. company
C) Tino's Italian Eatery, a local restaurant
D) Jones's wheat farm in eastern Washington
Correct answerD
15) A firm that can sell as much as it can produce at the market price is likely operating in:
A) a perfectly competitive market.
B) a monopoly market.
C) a monopolistically competitive market.
D) an oligopoly market.
Correct answerA16) A perfectly competitive firm can:
A) affect the market price for its good.
B) sell as much as it can produce at the market price.
C) prevent entry of other firms into their market.
D) collude with its competitors to set prices.
Correct answerB
17) A market where individual firms cannot affect the market price of their good is most likely:
A) a monopoly market.
B) an oligopoly market.
C) a monopolistically competitive market.
D) a perfectly competitive market.
Correct answerD
18) How does the firm-specific demand curve in a perfectly competitive market compare to that
in a monopoly?
A) The firm-specific demand curve in a perfectly competitive market is horizontal. The demand
curve in a monopoly is downward sloping.
B) They are the same.
C) The firm-specific demand curve in a perfectly competitive market is horizontal. The demand
curve in a monopoly is upward sloping.
D) The firm-specific demand curve in a perfectly competitive market is vertical. The demand
curve in a monopoly is horizontal.
Correct answerA
19) In which of the following market structures do you find many sellers?
A) monopoly
B) perfect competition
C) monopolistic competition
D) monopolistic competition and perfect competition
Correct answerD
20) In which of the following market structures do you no barriers to entry?
A) monopoly
B) perfect competition
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, C) monopolistic competition
D) monopolistic competition and perfect competition
Correct answerD
21) In which of the following market structures can you find differentiated products?
A) monopoly
B) perfect competition
C) oligopoly
D) monopolistic competition and oligopoly
Correct answerD
22) If a firm is a price taker, the demand curve faced by the firm is:
A) horizontal.
B) vertical.
C) downward sloping.
D) upward sloping.
Correct answerA
23) If the demand curve faced by a firm is horizontal, then the firm is ________ and a ________.
A) perfectly competitive; price taker
B) perfectly competitive; price maker
C) a monopoly; price taker
D) monopoly; price maker
Correct answerA
24) A perfectly competitive market is one where:
A) each firm controls the price charged for its product by changing the quantity they produce.
B) each firm sells at the government mandated price.
C) each firm within the market must sell its good at the market price.
D) a firm can affect market price by increasing output.
Correct answerC
25) Toby sells wheat in a perfectly competitive market. The demand curve for Toby's wheat is:
A) horizontal.
B) vertical.
C) downward sloping.
D) U-shaped.
Correct answerA
26) A perfectly competitive firm has no control over the price that it charges.
Correct answerTRUE
27) Oligopolies are characterized by many firms.
Correct answerFALSE
28) Monopolistically competitive industries are characterized by no barriers to entry.
Correct answerTRUE
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ANSWERS GRADED A+ 2025/2026
1) What is the characteristic of a perfectly competitive firm that causes it to be a price taker?
A) many buyers and sellers
B) homogeneous product
C) free entry and exit
D) A and B are correct.
Correct answerD
2) Which of the following is NOT a characteristic of a perfectly competitive market?
A) a large number of firms in a market
B) selling a standardized product
C) substantial barriers to entry
D) an individual firm having no control over price
Correct answerC
3) Which of the following is NOT a characteristic of a perfectly competitive market?
A) a small number of firms in a market
B) selling a standardized product
C) no barriers to entry
D) an individual firm having no control over price
Correct answerA
4) Which of the following is a characteristic of a perfectly competitive market?
A) a large number of firms in a market
B) selling a standardized product
C) no barriers to entry
D) all of the above
Correct answerD
5) Consumers do not have a strong preference for the output of one seller over that of another in
a perfectly competitive market because:
A) there a large number of firms in the market.
B) the firms sell a standardized product.
C) there are no barriers to entry.
D) an individual firm has control over price.
Correct answerB
6) A perfectly competitive market:
A) is dominated by one firm.
B) consists of at most five firms.
C) is made up of a large number of firms.
D) consists of only one firm.
Correct answerC
7) Who are the price takers in a perfectly competitive market?
A) both the buyers and the sellers
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,B) the buyers
C) neither the buyers nor the sellers
D) the sellers
Correct answerA
8) A price taker is a buyer or a seller who:
A) takes the market price as given.
B) buys or sells only at a price where profits can be made.
C) accepts whatever price that the government legislates as the price of the good or service.
D) has the ability to influence the equilibrium price in the market.
Correct answerA
9) A price maker is a buyer or a seller who:
A) takes the market price as given.
B) buys or sells only at a price where profits can be made.
C) accepts whatever price that the government legislates as the price of the good or service.
D) has the ability to influence the equilibrium price in the market.
Correct answerD
10) Firms in a perfectly competitive market:
A) sell a differentiated product.
B) sell homogeneous products.
C) usually have large advertising budgets.
D) try to attract customers away from their competitors.
Correct answerB
11) A market in which firms sell a homogeneous product and cannot influence market price is
most likely:
A) a perfectly competitive market.
B) an oligopoly.
C) a monopolistically competitive market.
D) a monopoly market.
Correct answerA
12) In a market for a homogeneous good, if sellers and buyers can enter or exit a market freely ,
the market is most likely:
A) an oligopoly.
B) a monopolistically competitive market.
C) a monopoly.
D) a perfectly competitive market.
Correct answerD
13) Which of the following statements about a perfectly competitive market is INCORRECT?
A) There are many sellers, each supplying a small quantity.
B) There are many buyers, each purchasing a small quantity.
C) The market sell homogeneous products.
D) Buyers and sellers cannot enter exit the market freely.
Correct answerD
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,14) Which of the following is the best example of a perfectly competitive firm?
A) DeBeers Diamond Company
B) your local cable T.V. company
C) Tino's Italian Eatery, a local restaurant
D) Jones's wheat farm in eastern Washington
Correct answerD
15) A firm that can sell as much as it can produce at the market price is likely operating in:
A) a perfectly competitive market.
B) a monopoly market.
C) a monopolistically competitive market.
D) an oligopoly market.
Correct answerA16) A perfectly competitive firm can:
A) affect the market price for its good.
B) sell as much as it can produce at the market price.
C) prevent entry of other firms into their market.
D) collude with its competitors to set prices.
Correct answerB
17) A market where individual firms cannot affect the market price of their good is most likely:
A) a monopoly market.
B) an oligopoly market.
C) a monopolistically competitive market.
D) a perfectly competitive market.
Correct answerD
18) How does the firm-specific demand curve in a perfectly competitive market compare to that
in a monopoly?
A) The firm-specific demand curve in a perfectly competitive market is horizontal. The demand
curve in a monopoly is downward sloping.
B) They are the same.
C) The firm-specific demand curve in a perfectly competitive market is horizontal. The demand
curve in a monopoly is upward sloping.
D) The firm-specific demand curve in a perfectly competitive market is vertical. The demand
curve in a monopoly is horizontal.
Correct answerA
19) In which of the following market structures do you find many sellers?
A) monopoly
B) perfect competition
C) monopolistic competition
D) monopolistic competition and perfect competition
Correct answerD
20) In which of the following market structures do you no barriers to entry?
A) monopoly
B) perfect competition
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, C) monopolistic competition
D) monopolistic competition and perfect competition
Correct answerD
21) In which of the following market structures can you find differentiated products?
A) monopoly
B) perfect competition
C) oligopoly
D) monopolistic competition and oligopoly
Correct answerD
22) If a firm is a price taker, the demand curve faced by the firm is:
A) horizontal.
B) vertical.
C) downward sloping.
D) upward sloping.
Correct answerA
23) If the demand curve faced by a firm is horizontal, then the firm is ________ and a ________.
A) perfectly competitive; price taker
B) perfectly competitive; price maker
C) a monopoly; price taker
D) monopoly; price maker
Correct answerA
24) A perfectly competitive market is one where:
A) each firm controls the price charged for its product by changing the quantity they produce.
B) each firm sells at the government mandated price.
C) each firm within the market must sell its good at the market price.
D) a firm can affect market price by increasing output.
Correct answerC
25) Toby sells wheat in a perfectly competitive market. The demand curve for Toby's wheat is:
A) horizontal.
B) vertical.
C) downward sloping.
D) U-shaped.
Correct answerA
26) A perfectly competitive firm has no control over the price that it charges.
Correct answerTRUE
27) Oligopolies are characterized by many firms.
Correct answerFALSE
28) Monopolistically competitive industries are characterized by no barriers to entry.
Correct answerTRUE
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