Competitive Markets Quiz
Test your knowledge of Competitive Markets with these A-Level Economics questions.
This quiz consists of 10 questions. Scroll down to start the quiz!
Questions
What are the features of perfect competition?
Perfectly competitive markets have a large number of firms producing identical products
Are there are barriers to entry / exit in perfectly competitive markets?
There are No barriers to entry / exit exist
In the long run what type of profit does a perfectly competitive firm make?
Normal profits
Although firms are able to earn supernormal profits in the short term why can they not in the long term?
Because firms have perfect knowledge of the market differences in costs will be eradicated in the long term as all firms can behave in the same way
In which three ways does perfect competition achieve efficiency?
Allocative, productive and dynamic efficiency
What are the most common barriers to entry / exit that occur in the real world?
Barriers to contestability
Which market is most comparable to perfect competition?
The currency market
What two features exist to mean it’s not perfectly competitive?
Barriers to entry exist, Governments have an influence on the market
What are the main benefits of competition in the long run?
The efficient allocation of resources
The perfectly competitive model is a theoretical model and in reality markets fail to resemble it. To what extent do you agree with this statement? (30 marks)
Level 1 - Candidate identifies few issues. Doesn't apply economic concepts well. Lacks analysis and evaluation. Failure to link issues. Limited understanding of key terms. 0-6 marks
Level 2 - Candidate recognises a few issues and has a limited application of economic concepts. Basic links between issues. Basic understanding of key concepts and some understanding of relationships. 7-12 marks
Level 3 - Identifies a few issues. Applies economic concepts and ideas to the question. Limited evaluation. Links issues and concepts. Attempts to identify alternative points of view. 13-20 marks
Level 4 - Identify several issues. Inter relates economic issues. Talks in economic language and shows a good level of evaluation. Able to link issues and concepts. 21-26 marks
Level 5 - Shows extensive use of economic vocabulary and thought. Arguments are well formed and information is synthesised. Excellent evaluation of the question with thorough and valid arguments presented and analysed. 27-30 marks.
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