Question 1

The buyers and sellers who trade a particular good or service make up what we call a:&#10;A) market.&#10;B) store.&#10;C) mall.&#10;D) negotiators.

Accepted Answer

A market consists of the buyers and sellers of a particular good or service, and encompasses all of the exchanges that occur for that product. Stores and malls are physical locations where goods may be sold, but they do not necessarily encompass all of the transactions for a specific product or service. Negotiators are individuals or parties involved in the bargaining process of a transaction, but do not necessarily make up the entire market for a good or service.

Question 2

Consider the market for tacos. To figure out which buyers and sellers we should include in our description of this market, economists will consider:&#10;A) their physical proximity.&#10;B) the context.&#10;C) their preferences.&#10;D) the income levels.

Accepted Answer

Economists consider the context of the market to determine which buyers and sellers to include in their analysis. The context includes factors like the type of product being sold (in this case, tacos), the geographical market boundaries, and the characteristics of the buyers and sellers that are relevant to their participation in the market. Physical proximity, preferences, and income levels may influence market dynamics, but the context is what defines the market itself and determines which participants are relevant for analysis.

Question 3

In a _____ economy, private individuals (as opposed to a central planner) make decisions.&#10;A) market&#10;B) government controlled&#10;C) socialist&#10;D) barter

Accepted Answer

In a market economy, individuals and businesses make decisions regarding production, consumption, and investment based on market demand and supply. In contrast, a government-controlled economy is characterized by state ownership and central planning, while a socialist economy emphasizes collective ownership and control of production and distribution. A barter economy is one where goods and services are exchanged directly without the use of money.

Question 4

Which of the following is the best example of a standardized good?&#10;A) Corn&#10;B) A handbag&#10;C) An autographed baseball&#10;D) Breakfast cereal

Accepted Answer

Corn is considered a standardized good because it is largely uniform in quality and can be easily traded on commodities markets. Other options like handbags, autographed baseballs, and breakfast cereals are differentiated by brand, quality, or unique characteristics, making them less standardized.

Question 5

The term market refers to:&#10;A) a physical location where buyers and sellers meet to exchange goods for money.&#10;B) the buyers and sellers who trade a particular good or service, not to a physical location.&#10;C) a location where buyers go to fulfill their wants and needs.&#10;D) a hypothetical place of exchange.

Accepted Answer

The term market refers to the buyers and sellers who trade a particular good or service, not necessarily a physical location. While in the past markets may have referred to physical locations such as town squares or bazaars, in modern times markets often exist as virtual platforms or networks where buyers and sellers can connect and exchange goods and services.

Question 6

A perfectly competitive market is one in which _____ buyers and sellers easily trade a standardized good or service.&#10;A) fully informed, price-taking&#10;B) fully informed, price-making&#10;C) uninformed, price-taking&#10;D) uninformed, price-making

Accepted Answer

A perfectly competitive market requires that buyers and sellers be fully informed about the market and that they are price-takers rather than price-makers. This means that no individual buyer or seller has enough market power to influence the market price. A standardized good or service also contributes to the ease of trade in a perfectly competitive market.

Question 7

What are transaction costs?&#10;A) The costs incurred by buyers and sellers in agreeing to and executing a sale of goods or services.&#10;B) The costs that the government must pay to allow for an exchange.&#10;C) The costs incurred by buyers and sellers in agreeing to and executing a purchase of goods or services, excluding transportation costs.&#10;D) The costs that the government incurs to create a structured market for the exchange of goods and services.

Accepted Answer

Transaction costs refer to the costs incurred by buyers and sellers in agreeing to and executing a sale of goods or services, such as legal fees, advertising costs, and negotiation costs. Option B is incorrect because the government is not necessarily involved in every transaction. Option C is incorrect because transportation costs are also included in transaction costs. Option D is incorrect because the government's role in creating a structured market does not necessarily affect transaction costs.

Question 8

For almost all goods, the:&#10;A) lower the price goes, the higher the quantity demanded.&#10;B) higher the price goes, the more luxurious it is.&#10;C) lower the price goes, the higher demand is.&#10;D) higher the price goes, the higher the quantity demanded.

Accepted Answer

For most goods, as the price decreases, the quantity demanded increases, following the law of demand.

Question 9

The four important characteristics that define a perfectly competitive market are:&#10;A) a standardized good, full information, no transaction costs, and price-taking participants.&#10;B) standardized information, a finished good, no transaction costs, and price-making participants.&#10;C) a standardized good, the same information for buyers and sellers, low transaction costs, and price-taking participants.&#10;D) a standardized good, full information, no transaction costs, and price-making participants.

Accepted Answer

A perfectly competitive market is characterized by the presence of a standardized good, full information, no transaction costs, and price-taking participants. In such a market, all firms produce homogeneous products that are indistinguishable from each other, and buyers and sellers have access to information about the market, which enables them to make informed decisions. Furthermore, there are no barriers to entry or exit, and participants are price takers, meaning they have no control over market prices and must accept the prevailing prices. This results in a highly efficient market where prices are determined solely by supply and demand.

Question 10

Why is the market for used cars not considered to be perfectly competitive?&#10;A) There is complete information.&#10;B) The buyers are not price takers.&#10;C) The good is standardized.&#10;D) There are always very low transaction costs.

Accepted Answer

The market for used cars is not considered to be perfectly competitive because the buyers are not price takers. This means that they have some bargaining power and can negotiate prices with sellers, which is not possible in a perfectly competitive market where prices are set by supply and demand forces.

Question 11

In economic terminology, a buyer or seller who cannot affect the market price is called a:&#10;A) price taker.&#10;B) price maker.&#10;C) price setter.&#10;D) price signaler.

Accepted Answer

The answer of In economic terminology, a buyer or seller...

Question 12

Demand describes how much of something people:&#10;A) are willing and able to buy at alternative prices under certain circumstances.&#10;B) want, but may not necessarily be able, to buy under certain circumstances.&#10;C) are willing and able to sell under certain circumstances.&#10;D) are able to buy, but might not want to buy under certain circumstances.

Accepted Answer

The answer of Demand describes how much of something people:&#10;A)...

Question 13

We study the simple model of competitive markets because it helps to:&#10;A) provide useful insights to markets that are not perfectly competitive.&#10;B) show how the government controls the economy.&#10;C) indicate whether buyers or sellers matter more.&#10;D) show how poorly the economy actually functions.

Accepted Answer

The answer of We study the simple model of competitive...

Question 14

A price taker is a buyer or seller who:&#10;A) cannot affect the market price.&#10;B) takes the market price and chooses to increase or decrease it.&#10;C) takes prices in the area and averages them together to set the price for his or her good.&#10;D) can affect the market price only when collaborating with other buyers or sellers.

Accepted Answer

The answer of A price taker is a buyer or...

Question 15

Members who shop at a warehouse store, such as Sam's Club or Costco, pay very low prices on the goods and services they buy. Do these sorts of customers incur transaction costs?&#10;A) Yes, because they must be members to shop at the store.&#10;B) No, because they pay prices that are lower than at any other location.&#10;C) Yes, because they must buy a product in bulk.&#10;D) No, because they can return purchases for any reason.

Accepted Answer

The answer of Members who shop at a warehouse store,...

Question 16

The law of demand describes the:&#10;A) inverse relationship between price and quantity demanded.&#10;B) direct relationship between price and quantity demanded.&#10;C) inverse relationship between income and quantity demanded.&#10;D) direct relationship between income and quantity demanded.

Accepted Answer

The answer of The law of demand describes the:&#10;A) inverse...

Question 17

The amount of a particular good or service that buyers in a market will purchase at a given price during a specified period is called:&#10;A) quantity demanded.&#10;B) quantity supplied.&#10;C) demand.&#10;D) supply.

Accepted Answer

The answer of The amount of a particular good or...

Question 18

Which of the following statements describes a standardized good or service?&#10;A) Any two units have the same features and are interchangeable.&#10;B) Any two units have similar features and could be considered close substitutes.&#10;C) Any two units have different, unique features.&#10;D) Any two units are economically unique with distinguishable characteristics.

Accepted Answer

The answer of Which of the following statements describes a...

Question 19

The best example of a perfectly competitive market would be the market for:&#10;A) grain.&#10;B) shoes.&#10;C) computers.&#10;D) cameras.

Accepted Answer

The answer of The best example of a perfectly competitive...

Question 20

Perfectly competitive markets are:&#10;A) the most common type of market in our economy.&#10;B) hard to find in a real-world setting.&#10;C) made up principally by consumer goods.&#10;D) typically found in industrial sectors of our economy.

Accepted Answer

The answer of Perfectly competitive markets are:&#10;A) the most common...

Question 21

The table shows individual demand schedules for a market. What is the equilibrium price in this market?&#10;A) $0.50&#10;B) $1.50&#10;C) $2.00&#10;D) The equilibrium price cannot be determined without more information.

Accepted Answer

The answer of   The table shows individual demand...

Question 22

Ceteris paribus is:&#10;A) the Latin term for &#34;all other things being the same.&#34;&#10;B) only necessary for the definition of the law of demand.&#10;C) often used by economists to isolate the effect of a multiple changes that are important.&#10;D) the Latin term for &#34;as things change only consider these changes&#34;.

Accepted Answer

The answer of Ceteris paribus is:&#10;A) the Latin term for...

Question 23

Which of the following is not a non-price determinant of demand?&#10;A) Consumer preferences&#10;B) Income of the consumers&#10;C) The number of sellers in the market&#10;D) The prices of related goods

Accepted Answer

The answer of Which of the following is not a...

Question 24

When graphing the demand curve:&#10;A) quantity goes on the horizontal axis and price goes on the vertical axis.&#10;B) quantity goes on the vertical axis and price goes on the horizontal axis.&#10;C) both quantity and price go on the horizontal axis.&#10;D) it doesn't matter which axis price and quantity are placed on.

Accepted Answer

The answer of When graphing the demand curve:&#10;A) quantity goes...

Question 25

The table shows individual demand schedules for a market. What can be said of Betty and Barney's demands for this good?&#10;A) Both of their demands follow the law of demand.&#10;B) Barney's demand follows the law of demand, but Betty's does not.&#10;C) Betty's demand follows the law of demand, but Barney's does not.&#10;D) Neither of their demands follows the law of demand.

Accepted Answer

The answer of   The table shows individual demand...

Question 26

The &#34;Made in the USA&#34; campaign was popularized by unions in an effort to influence which determinant of demand?&#10;A) Incomes&#10;B) Consumer preferences&#10;C) Expectations of future prices&#10;D) Prices of related goods

Accepted Answer

The answer of The &#34;Made in the USA&#34; campaign was...

Question 27

On the first day of school, Jackie notices many of her classmates are wearing Converse sneakers. Ever the fashionista, this will likely affect:&#10;A) Jackie's income, as she will now buy Converse sneakers and will have less to spend on other goods.&#10;B) Jackie's preferences for Converse sneakers, since she feels as though she needs them now.&#10;C) Jackie's expectations of future prices, since the price of Converse sneakers will likely increase due to their popularity.&#10;D) the prices of related goods, since other sneakers will be less popular and thus their prices will decrease.

Accepted Answer

The answer of On the first day of school, Jackie...

Question 28

Ren loves to go to the movie theater, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. Which of the following factors of demand caused the change in Ren's behavior?

A) Income
B) Price
C) Consumer preferences
D) Number of buyers

Accepted Answer

The answer of Ren loves to go to the movie...

Question 29

An article about how coffee boosts critical thinking is likely to affect which determinant of demand?&#10;A) Incomes&#10;B) Consumer preferences&#10;C) Number of sellers in the market&#10;D) Price

Accepted Answer

The answer of An article about how coffee boosts critical...

Question 30

The demand schedule assumes that factors other than price:&#10;A) remain the same.&#10;B) must also be in the table.&#10;C) remain separate in the table.&#10;D) change as price changes.

Accepted Answer

The answer of The demand schedule assumes that factors other...

Question 31

A demand schedule is a _____ that shows the quantities of a particular good or service that consumers are willing to purchase at various _____.&#10;A) table; prices&#10;B) graph; prices&#10;C) table; income levels&#10;D) line; prices

Accepted Answer

The answer of A demand schedule is a _____ that...

Question 32

A non-price determinant of demand refers to something:&#10;A) other than demand that affects the price.&#10;B) other than the price that affects demand.&#10;C) that determines how large a role price plays in the demand decision.&#10;D) that determines how prices are affected by income.

Accepted Answer

The answer of A non-price determinant of demand refers to...

Question 33

The demand curve:&#10;A) represents consumers' willingness, but not ability, to buy.&#10;B) shows the highest amount consumers are able to pay for a specific quantity.&#10;C) visually displays the demand schedule.&#10;D) represents consumers' ability, but not willingness, to buy.

Accepted Answer

The answer of The demand curve:&#10;A) represents consumers' willingness, but...

Question 34

The table shows individual demand schedules for a market. If the price of the good is $0.50, total demand by Betty and Barney will be:&#10;A) 18 units.&#10;B) 36 units.&#10;C) 75 units.&#10;D) 47 units.

Accepted Answer

The answer of   The table shows individual demand...

Question 35

The table shows individual demand schedules for a market. At a price of $1.00, how much of the good will be demanded by Betty?&#10;A) 16&#10;B) 11&#10;C) 46&#10;D) 30

Accepted Answer

The answer of   The table shows individual demand...

Question 36

The demand curve is a(n) _____ line that reflects the _____ relationship between price and quantity.&#10;A) downward-sloping; inverse&#10;B) upward-sloping; inverse&#10;C) downward-sloping; positive&#10;D) upward-sloping; direct

Accepted Answer

The answer of The demand curve is a(n) _____ line...

Question 37

The law of demand states that, all else held equal:&#10;A) quantity demanded rises as price falls.&#10;B) quantity demanded rises as price rises.&#10;C) quantity demanded rises as income rises.&#10;D) demand rises as price falls.

Accepted Answer

The answer of The law of demand states that, all...

Question 38

The demand curve represents the relationship between _____, with everything else held constant.&#10;A) price and quantity demanded&#10;B) income and quantity demanded&#10;C) consumer preferences and quantity demanded&#10;D) income and price demanded

Accepted Answer

The answer of The demand curve represents the relationship between...

Question 39

A demand curve is a graph that:&#10;A) visually displays the demand schedule.&#10;B) depicts various price-quantity combinations of a good for a seller.&#10;C) shows the quantities demanded by consumers of a particular good or service at various incomes.&#10;D) shows the quantities demanded by consumers of a particular good or service at one price.

Accepted Answer

The answer of A demand curve is a graph that:&#10;A)...

Question 40

A table that shows the quantities of a particular good or service that consumers are willing to purchase at various prices is known as a:&#10;A) demand schedule.&#10;B) demand figure.&#10;C) demand curve.&#10;D) demand graph.

Accepted Answer

The answer of A table that shows the quantities of...

Question 41

A decrease in the price of spaghetti noodles is likely to cause a(n) _____ in the demand for penne pasta, due to a change in the price of a _____.&#10;A) increase; complementary good&#10;B) increase; substitute good&#10;C) decrease; complementary good&#10;D) decrease; substitute good

Accepted Answer

The answer of A decrease in the price of spaghetti...

Question 42

Demand for Shell gasoline will increase if the price of:&#10;A) motor vehicles increases.&#10;B) BP gasoline increases.&#10;C) BP gasoline decreases.&#10;D) Shell gasoline decreases.

Accepted Answer

The answer of Demand for Shell gasoline will increase if...

Question 43

The city of Provincetown is a very popular spot for tourism during the summer months. What would we expect to occur in this town?&#10;A) The demand for normal goods would increase each summer.&#10;B) The demand for normal goods would decrease each summer.&#10;C) The prices of all normal goods would decrease each summer.&#10;D) The demand curve for normal goods would shift to the left.

Accepted Answer

The answer of The city of Provincetown is a very...

Question 44

An increase in the price of Heinz ketchup is likely to cause a(n) _____ in the demand for Hunt's ketchup, due to a change in _____.&#10;A) increase; consumer preferences&#10;B) increase; the price of a substitute good&#10;C) decrease; consumer preferences&#10;D) increase; the price of a complementary good

Accepted Answer

The answer of An increase in the price of Heinz...

Question 45

We say that goods are substitutes when they:&#10;A) serve similar-enough purposes that a consumer might purchase one in place of the other.&#10;B) are consumed together, so that purchasing one will make a consumer more likely to purchase the other.&#10;C) can replace something consumers typically purchase at a significantly lower price.&#10;D) change a consumer's preferences for a good or service.

Accepted Answer

The answer of We say that goods are substitutes when...

Question 46

Junie is shopping for dinner. She notices that hamburgers are on sale, so she puts the hamburgers in her cart instead of the hot dogs she originally came to the store to buy. She then heads over to the bread aisle to pick up hamburger buns. The change in Junie's demand for hamburger buns is due to a change in:

A) the price of related goods.
B) Junie's income.
C) Junie's preferences.
D) Junie's expectation of future prices.

Accepted Answer

The answer of Junie is shopping for dinner. She notices...

Question 47

The most likely complementary good for cereal would be:&#10;A) a bagel.&#10;B) milk.&#10;C) pizza.&#10;D) a sub sandwich.

Accepted Answer

The answer of The most likely complementary good for cereal...

Question 48

The city of Burlington experiences very high temperatures each summer and very low temperatures each winter. We would expect the demand for ice cream to:&#10;A) increase constantly.&#10;B) decrease each summer and increase each winter.&#10;C) increase each summer and decrease each winter.&#10;D) decrease constantly.

Accepted Answer

The answer of The city of Burlington experiences very high...

Question 49

The most likely substitute good for cereal would be:&#10;A) a bagel.&#10;B) milk.&#10;C) pizza.&#10;D) a hot dog.

Accepted Answer

The answer of The most likely substitute good for cereal...

Question 50

A decrease in the price of ice cream is likely to cause a(n) _____ in the demand for ice cream cones, due to a change in _____.&#10;A) increase; the price of a complementary good&#10;B) increase; the price of a substitute good&#10;C) increase; consumer preferences&#10;D) decrease; the price of a related good

Accepted Answer

The answer of A decrease in the price of ice...

Question 51

The demand for Snickers candy bars will decrease if:&#10;A) the price of Snickers candy bars decreases.&#10;B) a news story claims 95 percent of all geniuses eat at least one Snickers candy bar a day.&#10;C) the price of Milky Way candy bars (a substitute) decreases.&#10;D) the price of Milky Way candy bars (a substitute) increases.

Accepted Answer

The answer of The demand for Snickers candy bars will...

Question 52

Oliver just brought home a new kitten. We could expect Oliver's demand for:&#10;A) cat toys, a complementary good, to increase.&#10;B) cat toys, a complementary good, to decrease.&#10;C) dog toys, a substitute good, to increase.&#10;D) dog toys, a substitute good, to decrease.

Accepted Answer

The answer of Oliver just brought home a new kitten....

Question 53

Bob just got laid off from his job and now has no income. What can we assume about his demand?&#10;A) His demand for normal goods will increase.&#10;B) His demand for inferior goods will increase.&#10;C) His demand for inferior goods will decrease.&#10;D) His demand for normal goods will stay the same.

Accepted Answer

The answer of Bob just got laid off from his...

Question 54

The most likely complementary good for hot dogs would be:&#10;A) ketchup.&#10;B) burgers.&#10;C) tacos.&#10;D) pizza.

Accepted Answer

The answer of The most likely complementary good for hot...

Question 55

Suppose John just won the Mega Millions lottery jackpot. What can we assume about his demand?&#10;A) His demand for normal goods will increase.&#10;B) His demand for inferior goods will increase.&#10;C) His demand for normal goods will decrease.&#10;D) His demand for normal goods will stay the same.

Accepted Answer

The answer of Suppose John just won the Mega Millions...

Question 56

After getting a raise at work, Tiana now regularly buys steak instead of hamburger. Based on this behavior, what can we assume about these goods for Tiana?&#10;A) Steak is a normal good and hamburger is an inferior good.&#10;B) Steak is an inferior good and hamburger is a normal good.&#10;C) Steak and hamburger are complementary goods.&#10;D) Steak and hamburger are normal goods.

Accepted Answer

The answer of After getting a raise at work, Tiana...

Question 57

An increase in the price of butter is likely to cause the demand for:&#10;A) olive oil to increase.&#10;B) olive oil to decrease.&#10;C) butter to increase.&#10;D) butter to decrease.

Accepted Answer

The answer of An increase in the price of butter...

Question 58

Jan heads to the store to buy burgers for dinner. Seeing a sale on hot dogs, she buys those instead. The change in her demand for burgers is due to which factor?&#10;A) Consumer preferences&#10;B) Income&#10;C) Prices of related goods&#10;D) Number of buyers

Accepted Answer

The answer of Jan heads to the store to buy...

Question 59

We say that goods are complements when they:&#10;A) serve similar-enough purposes that a consumer might purchase one in place of the other.&#10;B) are consumed together, so that purchasing one will make a consumer more likely to purchase the other.&#10;C) can replace something consumers typically purchase at a significantly lower price.&#10;D) change a consumer's preferences for a good or service.

Accepted Answer

The answer of We say that goods are complements when...

Question 60

The most likely substitute good for hot dogs would be:&#10;A) ketchup.&#10;B) burgers.&#10;C) potato chips.&#10;D) a plate.

Accepted Answer

The answer of The most likely substitute good for hot...

Question 61

With the baby boomer generation hitting the retirement age, waiting lists to get into nursing homes are on the rise. In this situation, we could reasonably expect the demand for geriatric care to:&#10;A) increase due to the number of buyers increasing.&#10;B) decrease due to the number of buyers increasing.&#10;C) increase due to expectations of future prices.&#10;D) decrease due to expectations of future prices.

Accepted Answer

The answer of With the baby boomer generation hitting the...

Question 62

Which of the following would not affect an individual's demand?&#10;A) Prices of related goods&#10;B) The individual's preferences&#10;C) The individual's income&#10;D) The costs of inputs

Accepted Answer

The answer of Which of the following would not affect...

Question 63

Suppose the demand for socks has decreased. This change can be shown graphically as a:&#10;A) shift in the demand curve to the right.&#10;B) shift in the demand curve to the left.&#10;C) movement along the demand curve to the right.&#10;D) movement along the demand curve to the left.

Accepted Answer

The answer of Suppose the demand for socks has decreased....

Question 64

A news report states that the housing market is making a comeback and that house prices are on the rise. This information is likely to:&#10;A) increase the demand for houses due to a change in expectations of future prices.&#10;B) decrease the demand for houses due to a change in expectations of future prices.&#10;C) have no effect on the current housing market, but will increase the demand for houses in the future.&#10;D) have no effect on the demand for houses, but it will decrease the supply.

Accepted Answer

The answer of A news report states that the housing...

Deck 3: Markets