Podcast
Questions and Answers
Which article of the Spanish Constitution recognizes the freedom of enterprise within a market economy?
Which article of the Spanish Constitution recognizes the freedom of enterprise within a market economy?
- Article 99
- Article 47
- Article 121
- Article 38 (correct)
What is considered the foundation of a market economy, according to the principles outlined?
What is considered the foundation of a market economy, according to the principles outlined?
- State Monopolies
- Central Planning
- Government Regulation
- Free Competition (correct)
In what ways do oligopolies potentially undermine free competition?
In what ways do oligopolies potentially undermine free competition?
- By fostering innovation and competitive pricing strategies.
- By promoting diverse product offerings and consumer choice.
- By encouraging new businesses to enter the market.
- By colluding to limit competition like monopolies. (correct)
Which of the following is an example of anticompetitive conduct by businesses?
Which of the following is an example of anticompetitive conduct by businesses?
What is the primary goal of businesses in a competitive market environment?
What is the primary goal of businesses in a competitive market environment?
Even within free-market economies, certain sectors are subject to government planning. Which of the following is an example of such a sector?
Even within free-market economies, certain sectors are subject to government planning. Which of the following is an example of such a sector?
What distinguishes a monopoly from a competitive market?
What distinguishes a monopoly from a competitive market?
How can a dominant firm engage in unfair practices to eliminate competitors?
How can a dominant firm engage in unfair practices to eliminate competitors?
What is the primary aim of deregulation efforts in sectors like telecommunications, energy, and transport?
What is the primary aim of deregulation efforts in sectors like telecommunications, energy, and transport?
How do collusive agreements among businesses affect market competition?
How do collusive agreements among businesses affect market competition?
What is the role of the consumer in a competitive market, as defined in the principles?
What is the role of the consumer in a competitive market, as defined in the principles?
Which of the following is a key characteristic of a competitive market?
Which of the following is a key characteristic of a competitive market?
Why is free competition considered essential for a market economy?
Why is free competition considered essential for a market economy?
Which scenario best exemplifies an abuse of a dominant market position?
Which scenario best exemplifies an abuse of a dominant market position?
Which of the following factors typically limits the extent of free competition in a market economy?
Which of the following factors typically limits the extent of free competition in a market economy?
How do collusive agreements, such as price-fixing, harm consumers in a market economy?
How do collusive agreements, such as price-fixing, harm consumers in a market economy?
In a free market economy, if a company holds a dominant position, what actions might be considered an 'abuse' of that position?
In a free market economy, if a company holds a dominant position, what actions might be considered an 'abuse' of that position?
What distinguishes an oligopoly from a perfectly competitive market?
What distinguishes an oligopoly from a perfectly competitive market?
What is a potential consequence of monopolies on market dynamics and consumer welfare?
What is a potential consequence of monopolies on market dynamics and consumer welfare?
If multiple businesses engage in collusive agreements, how does it typically affect the overall market environment?
If multiple businesses engage in collusive agreements, how does it typically affect the overall market environment?
Flashcards
Freedom of enterprise
Freedom of enterprise
Freedom to start a business within a market economy.
Competitive market
Competitive market
Businesses compete for customers, who choose the best offers.
Free competition
Free competition
The basis of a market economy, promoting efficiency and innovation.
Limitations to free competition
Limitations to free competition
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Government planning
Government planning
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Monopoly
Monopoly
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Oligopoly
Oligopoly
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Collusive agreements
Collusive agreements
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Abuse of dominant position
Abuse of dominant position
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Study Notes
- Article 38 of the Spanish Constitution acknowledges the freedom of enterprise within a market economy.
- Businesses compete to attract consumers in a competitive market whilst consumers freely choose the best offers.
- Free competition serves as the base of a market economy, promoting efficiency, innovation, and also consumer benefits.
Limitations to Free Competition
- Competition is desirable but not absolute, and it encounters several restrictions.
- Government planning regulates sectors via price control and licensing requirements, even in free-market economies.
- There have been deregulation efforts in telecommunications, energy, and transport in recent years.
- Monopolies eliminate competition, including those formerly established by the state (e.g., salt and matches in Spain).
- Oligopolies consist of a few dominant firms and can behave like monopolies by colluding to restrict competition.
Anticompetitive Conduct by Business
- Collusive agreements happen when businesses coordinate to avoid competition, such as price-fixing.
- Abuse of dominant position involves a leading firm using unfair practices to eliminate competitors.
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