chapter 04 - Chapter 4 The Market Forces of Supply and...

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Unformatted text preview: Chapter 4 The Market Forces of Supply and Demand TRUE/FALSE 1. Prices allocate a market economys scarce resources. ANS: T DIF: 1 REF: 4-0 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional 2. In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold. ANS: T DIF: 1 REF: 4-0 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional 3. A market is a group of buyers and sellers of a particular good or service. ANS: T DIF: 1 REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Definitional 4. Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product. ANS: F DIF: 1 REF: 4-1 NAT: Analytic LOC: Supply and demand TOP: Demand | Supply MSC: Definitional 5. A yard sale is an example of a market. ANS: T DIF: 2 REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Applicative 6. A newspapers classified ads are an example of a market. ANS: T DIF: 2 REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Applicative 7. Most markets in the economy are highly competitive. ANS: T DIF: 1 REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Definitional 8. In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller. ANS: T DIF: 1 REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Competitive markets MSC: Definitional 9. In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price. ANS: F DIF: 1 REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Competitive markets MSC: Definitional 10. In a perfectly competitive market, the goods offered for sale are all exactly the same. ANS: T DIF: 1 REF: 4-1 NAT: Analytic LOC: Perfect competition TOP: Perfect competition MSC: Definitional 202 203 Chapter 4 /The Market Forces of Supply and Demand 11. In a perfectly competitive market, buyers and sellers are price setters. ANS: F DIF: 1 REF: 4-1 NAT: Analytic LOC: Perfect competition TOP: Perfect competition MSC: Definitional 12. All goods and services are sold in perfectly competitive markets. ANS: F DIF: 1 REF: 4-1 NAT: Analytic LOC: Perfect competition TOP: Perfect competition MSC: Definitional 13. If a good or service has only one seller, then the seller is called a monopoly. ANS: T DIF: 1 REF: 4-1 NAT: Analytic LOC: Monopoly TOP: Monopoly MSC: Definitional 14. Monopolists are price takers....
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chapter 04 - Chapter 4 The Market Forces of Supply and...

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