Question 1

People who develop new products and production processes increase their profitability by taking out ________ on their inventions.

Accepted Answer

The answer of People who develop new products and production...

Question 2

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses.In response,entrepreneurs would

Accepted Answer

If a product suddenly loses popularity and firms begin to realize large losses, entrepreneurs are likely to exit the market and decrease production in order to minimize their losses. This will reduce the overall supply of the product and help to stabilize prices. Entering the market at this point would be a risky move as demand has already decreased, and increasing production would exacerbate the oversupply issue.

Question 3

In order to have reliable information about commercial enterprises and to encourage other people to invest their time and money,________ have been established to ensure universal understanding.

Accepted Answer

The answer of In order to have reliable information about...

Question 4

During World War II before there was trade among camps,items not consumed by the majority of the camp (such as coffee in British camps and beef in Sikh camps)were

Accepted Answer

Items not consumed by the majority of a camp, such as coffee in British camps and beef in Sikh camps, became cheaper due to lower demand within those specific camps. This is based on the principle of supply and demand; when demand for an item is low, its price tends to decrease.

Question 5

When people exchange things,trading what they have for what they want,it is called a(n)________ economy.

Accepted Answer

The answer of When people exchange things,trading what they have...

Question 6

Identify markets in which there is an exchange.

Accepted Answer

The answer of Identify markets in which there is an...

Question 7

Under a market system,the people with information about buyers' desires,production technology,and resources make the decisions.

Accepted Answer

In a market system, individuals with information about buyers' desires (i.e. demand), production technology, and resources have the most influence in making economic decisions. This includes producers, consumers, and resource owners who collectively determine the allocation of resources and the quantity and types of goods and services produced.

Question 8

Suppose a new use for aluminum has been discovered,making aluminum more expensive.In a market system,

Accepted Answer

If a new use for aluminum has been discovered and its demand has increased, the price of aluminum will go up, leading aluminum roof producers to look for substitutes for aluminum, while aluminum producers will likely increase production to meet the new demand. Additionally, auto manufacturers may find it in their best interests to use more aluminum due to its increased availability and popularity. Therefore, both A and B are correct.

Question 9

To specify terms of exchange and facilitate exchange between strangers,a(n)________ is often used.

Accepted Answer

The answer of To specify terms of exchange and facilitate...

Question 10

Recall the Application about the market for meteorites to answer the following question(s).
-According to the Application,what determines the price of a meteorite?

Accepted Answer

According to the Application, the rarity of a meteorite is one of the key factors that determines its price.

Question 11

Recall the Application about the market for meteorites to answer the following question(s).
-According to the Application,a chunk of space debris that enters our atmosphere is called a

Accepted Answer

A chunk of space debris that enters Earth's atmosphere is called a meteor.

Question 12

To make new commercial ventures more attractive for entrepreneurs,________ can be used to reduce risk.

Accepted Answer

The answer of To make new commercial ventures more attractive...

Question 13

Suppose a product suddenly becomes very popular and the firms producing the product begin to realize large profits.In response,entrepreneurs would

Accepted Answer

When a product becomes very popular and firms producing it begin to realize large profits, it signals to entrepreneurs that there is a profitable opportunity in the market. Thus, entrepreneurs would enter the market and increase production, taking advantage of the high demand and potentially high profits.

Question 14

Adam Smith used the metaphor "invisible hand" to explain that

Accepted Answer

Adam Smith's metaphor of the "invisible hand" suggests that individuals pursuing their own self-interest in a competitive market will unintentionally promote the economic interests of society as a whole by leading to greater innovation, efficiency, and productivity. The government's role in this view is limited to ensuring basic legal frameworks and protection of property rights. Option B suggests a government-centric view, while Option C assumes a certain level of altruism that is not necessarily present in Smith's framework. Option D is too general and not necessarily reflective of the complexities of economic theory.

Question 15

Recall the Application about the market for meteorites to answer the following question(s).
-According to the Application,a chunk of space debris that enters our atmosphere and survives an impact into the earth is called a

Accepted Answer

A chunk of space debris that survives an impact into the earth is called a meteorite. A meteor is the visible streak of light caused by a meteoroid entering Earth's atmosphere and burning up. A meteoroid is a small rocky or metallic body in space.

Question 16

During World War II,trade among camps caused the price of beef in camps with mainly Sikh prisoners who did NOT eat beef to

Accepted Answer

Since Sikh prisoners did not consume beef, the demand for beef in their camps was low. However, trade among camps allowed for beef to be moved to these camps, increasing the supply and reducing the price, bringing it roughly in line with the price in other camps where beef was consumed.

Question 17

Recall the Application about the market for meteorites to answer the following question(s).
-According to the Application,all meteorites are rare and expensive.

Accepted Answer

Not all meteorites are rare and expensive; while some are indeed rare and can fetch high prices, others are more common and less valuable. The value of a meteorite can vary widely based on its type, size, and scientific significance.

Question 18

Markets exist to facilitate exchange between people.

Accepted Answer

The primary purpose of markets is to allow individuals and businesses to exchange goods and services, whether through direct bartering or through the use of currency or other forms of exchange.

Question 19

The market system works by getting each person,motivated by his or her own self-interest,to produce products for other people.

Accepted Answer

The market system is based on the idea that individuals act in their own self-interest, seeking to maximize personal gain. This drives them to produce goods and services that others demand, and in turn, they can trade these goods and services in the marketplace to meet their own needs and wants. This creates a mutually beneficial exchange for both parties involved.

Question 20

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses.As firms exit the market,the equilibrium price in the market will

Accepted Answer

When firms exit the market due to large losses, the supply of the product decreases. With less supply, the equilibrium price increases, making it more attractive for the remaining firms to stay in business as they can potentially sell their products at higher prices.

Quiz 3: Exchange and Markets