G11 4th Q Economics Revision Sheet

4th Q- G11 - Economics Revision Sheet
Choose the correct answer: Chapters 7 & 8
1. In a market economy with perfect competition, sellers

A. control prices
B. enter and exit the market freely
C. join with other sellers to influence prices
D. have incomplete information about market conditions
ANS: B PTS: 4 REF: APS_act0976aaf1800656e5_42
NAT: NCEE.VCSE.SST.05.5-8.9.1 | NCEE.VCSE.SST.05.5-8.9.3 |
NCEE.VCSE.SST.05.9-12.9.1 | NCEE.VCSE.SST.05.9-12.9.2 TOP: Section: Form
A
NOT: economics_2007
2. Some examples of standardized products include

A. agricultural products, such as eggs and milk
B. clothing products, such as shirts and jeans
C. electronic products, such as DVD players and TVs
D. furniture products, such as chairs and tables
ANS: A PTS: 4 REF: APS_act0976aaf1800656e5_50
NAT: NCEE.VCSE.SST.05.9-12.13.4 TOP: Section: Form A
NOT: economics_2007
3. In a market economy with imperfect competition sellers

A. are always well-informed of market conditions
B. never have any control over price
C. offer only standardized products
D. sometimes join with other sellers to influence prices
ANS: D PTS: 4 REF: APS_act0976aaf1800656e5_58
NAT: NCEE.VCSE.SST.05.5-8.9.3 | NCEE.VCSE.SST.05.9-12.9.3
TOP: Section: Form A NOT: economics_2007
4. A market structure in which only one seller sells a product for which there are no close
substitutes is called a
A. cartel
B. monopoly
C. oligopoly
D. trust
NCEE.VCSE.SST.05.9-12.16.1 | NCEE.VCSE.SST.05.9-12.16.6
5. Monopolists are able to control prices because they have

A. much competition and there are many substitutes for their products
B. much competition and there are no close substitutes for their products
C. no competition and there are many substitutes for their products
D. no competition and there are no close substitutes for their products
6. A monopoly in which the costs of production are lowest when only one firm provides
output is called a
A. geographic monopoly
B. government monopoly
C. natural monopoly
D. technological monopoly
ANS: C PTS: 4 REF: APS_act0976aaf1800656e5_82
A
NOT: economics_2007
7. A monopoly that exists because a firm controls an invention is called a

A. geographic monopoly
B. government monopoly
C. natural monopoly
D. technological monopoly
8. A situation in which the average cost of production falls as the producer grows larger is
called
A. barrier to entry
B. economies of scale
C. predatory pricing
D. public disclosure
NOT: economics_2007
9. Using advertising to try to convince customers to buy one product rather than another is a
form of
A. antitrust competition
B. focus competition
C. monopolistic competition
D. nonprice competition
NCEE.VCSE.SST.05.9-12.9.2
10. With monopolistic competition there are

A. few sellers and few buyers
B. few buyers but many sellers
C. many buyers but few sellers
D. many buyers and many sellers
11. The expenses that a new business pay to enter a market are called
A. basic costs
B. entrance costs
C. initiation costs
D. start-up costs
12. An oligopolist sells

A. either standardized or differentiated products
B. more standardized than differentiated products
C. only differentiated products
D. only standardized products
13. Laws that give government the power to control monopolies and to break them up are
called
A. anticartel legislation
B. antimonopoly legislation
C. antimerger legislation
D. antitrust legislation
NCEE.VCSE.SST.05.9-12.16.6 TOP: Section: Form A
NOT: economics_2007
14. A merger happens when one company

A. causes another company go bankrupt
B. divides and forms several firms
C. joins another company to form a single firm
D. sells their business and reinvests in another market
NOT: economics_2007
15. Reducing or eliminating government control of business is called

A. deregulation
B. desisting
C. disclosure
D. discrimination
Part 2: Interpreting Tables

This table shows the financial results for airlines throughout the world for selected years.
In 1978, the United States passed a law deregulating the U.S. airline industry. At that
time, U.S. airlines made up about 70 percent of the world airline market. Using the
exhibit, choose the letter of the best answer.
16. In what years did airline revenue decline?

A. from 1977 to 1979
B. from 1985 to 1987
C. from 1992 to 1994
D. from 2000 to 2002
17. In what year did the airlines experience their greatest net loss?
A. 1975
B. 1992
C. 2001
D. 2004
18. In what year did the airlines experience their highest net profit margin?
A. 1977
B. 1978
C. 1988
D. 1997
19. In what year did the airlines experience their largest operating profit?
A. 1978
B. 1988
C. 1995
D. 1997
20. What conclusion can you draw from the information in this table?
A. After deregulation, the airlines always made a profit.
B. After deregulation, the airlines rarely made a profit.
C. After deregulation, the airlines never made a profit.
D. After deregulation, the airlines went through cycles of profitability followed by
losses.
Part 3: Extended Response

Answer the following questions on the back of this paper or on a separate sheet of paper.
21. What are the characteristics of perfect competition?
Think About:
- buyers and sellers
- products
- markets
ANS:
numerous buyers and sellers; standardized product; freedom to enter and exit markets;
independent buyers and sellers; well-informed buyers and sellers
PTS: 10 REF: APS_act0976aaf1800656e5_217

A
NOT: economics_2007
22. What are the differences between monopolistic competition and an oligopoly?
Think About:
- buyers and sellers
- types of products
- control of prices
ANS:
Monopolistic competition has many sellers and many buyers, but oligopoly has few
sellers and many buyers. All products in monopolistic competition are similar but
differentiated, whereas in oligopoly industrial products are standardized and consumer
products are differentiated. Producers in monopolistic competition have limited control of
prices, but those in oligopoly have more control. In monopolistic competition, firms are
free to enter and exit markets, but in oligopoly barriers to entry make it difficult for firms
to enter or exit markets.
PTS: 10 REF: APS_act0976aaf1800656e5_230

NCEE.VCSE.SST.05.9-12.9.3 | NCEE.VCSE.SST.05.9-12.16.1 |
TOP: Section: Form A NOT
23.What term is defined as an enterprise that produces goods or services, usually to make a
profit?
A. business organization
B. stock
C. unlimited liability
D. vertical merger
ANS: A PTS: 4 REF: APS_act0976aaf1800656f2_42
NOT: economics_2007
24. What does the term limited life mean?

A. The business is restricted in size.
B. There is a ceiling on the amount of business expenses.
C. There are many regulations about business activities.
D. The business does not continue if the owner leaves.
ANS: D PTS: 4 REF: APS_act0976aaf1800656f2_50
NOT: economics_2007
25. What do many people consider to be the chief advantage of sole proprietorship?
A. The owner has unlimited liability.
B. The owner keeps all the profits.
C. The owner has unlimited startup funds.
D. The owner does not have to obey labor laws.
ANS: B PTS: 4 REF: APS_act0976aaf1800656f2_58
NOT: economics_2007
26. What is a business owned and managed by a single person called?

A. conglomerate
B. general partnership
C. limited partnership
D. sole proprietorship
27. What is the term for a business that is co-owned by two or more people who agree on
how responsibilities, profits, and losses will be divided?
A. partnership
D. limited liability partnership
28. What is the term for a business in which none of the co-owners is responsible for the
debts or mistakes of the others?
A. partnership
D. limited liability partnership
29. Which of the following is an advantage of partnership but not of sole proprietorship?
A. few regulations
B. easy to open and close
C. specialization of skills
D. limited life
ANS: C PTS: 4 REF: APS_act0976aaf1800656f2_90
NOT: economics_2007
30. Which of the following is a disadvantage of partnership but not of sole proprietorship?
A. unlimited liability
B. potential for conflict
C. limited life
D. much stricter regulations
NOT: economics_2007
31. What is the name for an individual who owns a share of a corporation and is entitled to
part of its profits?
A. director
B. officer
C. president
D. stockholder
NOT: economics_2007
32. Which of the following is a corporation that issues stock that can be freely bought and
sold?
A. nonprofit corporation
B. multinational corporation
C. private corporation
D. public corporation
NOT: economics_2007
33. What is one of the major disadvantages of corporations?

A. limited funds
B. limited life
C. loss of control
D. unlimited liability
34. What is it called when companies that produce the same product merge?
A. horizontal merger
B. vertical merger
C. conglomerate
D. multinational corporation
NOT: economics_2007
35. What is the name for a contract in which a corporation promises to repay borrowed
money, plus interest, on a fixed schedule?
A. share
B. dividend
C. stock
D. bond
36. Angela opens a coffee shop, which she owns and where she sells a national brand of
gourmet coffee. She pays licensing fees to do this. What kind of business it this?
A. a franchise
B. a cooperative
C. a nonprofit
D. a partnership
37. What is a cooperative?

A. an institution that acts like a business organization but which does not make a
profit
B. a business that licenses the right to sell its products in a particular area
C. a business operated for the shared benefit of its owners, who are also its customers
D. a semi-independent business that buys the right to run a franchise
Part 2: Interpreting Graphs

Using the exhibit, choose the letter of the best answer.
*Percent do not add upto 100 because of rounding
38. What was the most common size for U.S. firms in 2002?
A. 0 employees
B. 1 to 4 employees
C. 10 to 19 employees
D. 500 or more employees
39. What percentage of U.S. firms had 0 to 4 employees in 2002?

A. 13.5
B. 33.8
C. 47.3
D. 60.8

A. 8.9
B. 10.8
C. 17.7
D. 47.3

A. 1.4
B. 8.9
C. 10.3
D. 10.6
42. If a firm has no employees, what form of business organization is it most likely to have?
A. sole proprietorship
B. partnership
D. corporation
Part 3: Extended Response

Answer the following questions on the back of this paper or on a separate sheet of paper.
43. What type of business organization is being portrayed in the cartoon below, and what has
happened to it? How do you know?
Think About:
- the types of business organization
- the way businesses combine
- the particular businesses named in the cartoon
ANS:
The man is calling a corporation, which has just gone through a series of horizontal
mergers. This is evident from the fact that he is told twice to call a different corporation
for help. All of the corporations mentioned are in the same industry --providing telephone
and Internet service.
PTS: 10 REF: APS_act0976aaf1800656f2_217 TOP: Section: Form A

NOT: economics_2007
44. What are the difficulties of starting a sole proprietorship?
Think About:
- the legal requirements
- the financial requirements
- advertising, marketing, and competition
ANS:
There are a few legal requirements, such as registering the business name and obtaining
any necessary licences. The major difficulty is obtaining enough money to launch the
business-money that buys merchandise, rents facilities, pays for advertising, etc. Once the
business has opened, it can be difficult to earn enough money to keep it going for the first
year or so because it takes time to build up a customer base. To do so, the business often
has to overcome competition from existing businesses.
PTS: 10 REF: APS_act0976aaf1800656f2_230

NOT: economics_2007

G11 4th Q Economics Revision Sheet

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G11 4th Q Economics Revision Sheet

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4th Q- G11 - Economics Revision Sheet

Choose the correct answer: Chapters 7 & 8

1. In a market economy with perfect competition, sellers

2. Some examples of standardized products include

3. In a market economy with imperfect competition sellers

5. Monopolists are able to control prices because they have

7. A monopoly that exists because a firm controls an invention is called a

10. With monopolistic competition there are

12. An oligopolist sells

14. A merger happens when one company

15. Reducing or eliminating government control of business is called

Part 2: Interpreting Tables

16. In what years did airline revenue decline?

Part 3: Extended Response

21. What are the characteristics of perfect competition?

PTS: 10 REF: APS_act0976aaf1800656e5_217

PTS: 10 REF: APS_act0976aaf1800656e5_230

24. What does the term limited life mean?

26. What is a business owned and managed by a single person called?

33. What is one of the major disadvantages of corporations?

37. What is a cooperative?

Part 2: Interpreting Graphs

*Percent do not add upto 100 because of rounding

39. What percentage of U.S. firms had 0 to 4 employees in 2002?

40. What percentage of U.S. firms had 5 to 9 employees in 2002?

41. What percentage of U.S. firms had 20 to 499 employees in 2002?

Part 3: Extended Response

PTS: 10 REF: APS_act0976aaf1800656f2_217 TOP: Section: Form A

44. What are the difficulties of starting a sole proprietorship?

PTS: 10 REF: APS_act0976aaf1800656f2_230

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