macro
Should an economist consider a Web-based job search portal like Monster.com as a market?
: Economists define a market as a group of economic agents who are trading a good or service, and the rules and arrangements for trading. It need not have a specific physical location. Monster.com is a Web-based job market that operates wherever there's a computer and an Internet connection.
Which of the following is NOT an example of a market? A) A cattle auction, where farmers and ranchers bring cattle to be purchased by packing plants B) Etsy.com, a Web site where artists, designers, and craftspersons offer items they have made to interested buyers C) A city requires homeowners to pay $500 for putting in a sidewalk on their street D) The National Residency Matching Program, where medical residents express their preferences for residencies, hospitals express their preferences for medical residents, and these preferences are used to match residents to residencies
A city requires homeowners to pay $500 for putting in a sidewalk on their street
The automobile market in the United States is often said to be highly competitive. But it is not perfectly competitive. What makes this market not perfectly competitive? A) Different car companies make different vehicles with different features. B) An individual car buyer can dictate what price he or she pays for a vehicle. C) More than three major car companies exist in this market. D) An individual seller can dictate what price a consumer pays for a vehicle.
A. Different car companies make different vehicles with different features
The gasoline market in the United States is often said to be highly competitive. But it is not perfectly competitive. What makes this market not perfectly competitive? A) If you don't like the price at one gas station, you can go to another one. B) Different companies put different additives (designed to reduce engine deposits) in the gas they sell. C) An individual seller can dictate what price a consumer pays for its gas. D) Gas stations located near each other tend to charge the same or very similar prices
B. Different companies put different additives (designed to reduce engine deposits) in the gas they sell
Which of the following does NOT have a market in the real world? A) First-class mail delivery in the United States, where the U.S. Postal Service is the only legal carrier of such mail B) Kidneys for transplant, for which you cannot legally receive or pay money C) Illegal narcotic substances D) None of the above
D. None of the above
The gasoline market in the United States is often said to be highly competitive. It is not perfectly competitive, but it has features and results that are similar to those of a perfectly competitive market, such as ________. A) an individual buyer cannot influence the market price of gasoline by himself B) gas stations located near each other tend to charge the same or very similar prices C) an individual gas station cannot influence the market price by itself D) all of the above
D. all of the above
What are the key features of a perfectly competitive market?
In a perfectly competitive market, (i) all sellers sell an identical good or service, and (ii) any individual buyer or any individual seller is not powerful enough to affect the market price of that good or service.
Which of the following is the most likely to be bought and sold in a perfectly competitive market? A) 24-karat gold B) cars C) breakfast cereal D) electricity
a. 24-karat gold
Which of the following statements correctly describes a perfectly competitive market? A) All participants in a perfectly competitive market are price-takers. B) Haggling and bargaining is commonly observed in a perfectly competitive market. C) In a perfectly competitive market, individual sellers and buyers can influence the market price. D) Buyers in a perfectly competitive market pay different prices according to their individual demand.
a. all participants in a perfectly competitive market are price takers
A market researcher asks three consumers, A, B, and C, about their willingness to pay for different quantities of a 20-ounce bottle of Lemon-Lime Gatorade. She collects the following information. 4) Refer to the scenario above. Which consumer has the highest willingness to pay for Gatorade? A) Consumer A B) Consumer B C) Consumer C D) Consumers A and B
a. consumer a
The willingness to pay for a commodity ________. A) decreases as consumption of the commodity increases B) increases as consumption of the commodity increases C) is always less than the market price of the commodity D) is always greater than the market price of the commodity
a. decreases as consumption of the commodity increases
Suppose the market for cement is such that the output of all sellers is identical in composition and quality. While there are a large number of buyers and sellers, everyone conducts transactions at a common market price. Which of the following statements is TRUE about the structure of the cement market? A) The cement market is perfectly competitive. B) The cement market is government regulated. C) All participants in the cement market are price-makers. D) All transactions in the cement market are likely to be involuntary.
a. the cement market is perfectly competitive
A seller who is a price-taker charges ________. A) the market price B) a price above the market price C) a price below the market price D) different prices to different buyers
a. the market price
Which of the following best describes the difference between a demand curve and a demand schedule? A) A demand curve can be derived from a demand schedule, but a demand schedule cannot be derived from a demand curve. B) A demand curve is a graphical representation of the relationship between the quantity of a good and its price, whereas a demand schedule is a tabular representation. C) A demand curve shows the different quantities of a good demanded at different prices, whereas a demand schedule shows the different quantities of a good demanded at different incomes. D) A demand curve shows the different quantities of a good demanded at different incomes, whereas a demand schedule shows the different quantities of a good demanded at different prices.
b. a demand curve is a graphical representation of the relationship between the quantity of a good and its price, whereas a demand schedule is a tabular representation
The demand curve for most goods is normally ________. A) upward sloping B) downward sloping C) parallel to the y-axis D) parallel to the x-axis
b. downward sloping
A(n) ________ is a group of buyers and sellers who are trading goods and/or services. A) firm B) market C) enterprise D) government
b. market
If all sellers and all buyers face the same price during an exchange, it is referred to as the ________. A) mark-up price B) market price C) discounted price D) cost price
b. market price
In competitive markets, firms ________. A) coordinate pricing decisions with other firms B) take the market price as given C) have the government set maximum and minimum prices D) set the market price
b. take the market price as given
1) Why do economists study perfectly competitive markets even though few, if any, markets in the real world are perfectly competitive? A) Because insights we gain from studying the perfectly competitive market are directly applicable to real markets, even though they are not perfectly competitive B) Because the behavior of buyers and sellers can be studied theoretically only in the perfectly competitive market model C) Because the perfectly competitive market is a good approximation to many markets in the real world and helps us understand how real markets work D) Because the perfectly competitive market is the most relevant model for actual government economic policies
c. Because the perfectly competitive market is a good approximation to many markets in the real world and help us understand how real markets work
) In a perfectly competitive market, ________. A) all exchanges take place involuntarily B) there is only one seller and many buyers C) all sellers sell an identical good or a service D) there is no provision for the protection of property rights
c. all sellers sell an identical good or service
The ________ plots the relationship between prices and the quantity that buyers are willing to purchase. A) marginal cost curve B) supply curve C) demand curve D) budget constraint
c. demand curve
Refer to the scenario above. If the price of Gatorade decreases from $4.00 per bottle to $3.50 per bottle, what is consumer C's change in quantity demanded? A) No increase B) Increase of 1 bottle C) Increase of 2 bottles D) Increase of 4 bottles
c. increase of 2 bottles
The demand schedule for a commodity illustrates how the consumption of a commodity changes with changes in ________. A) supply B) income C) its price D) tastes and preferences
c. its price
The Law of Demand states that ________. A) the demand for a commodity is directly related to consumers' income, all other things remaining constant B) the demand for a commodity always equals the supply of the commodity C) the quantity demanded of a commodity varies inversely with the price of the commodity, all other things remaining constant D) the quantity demanded of a commodity is the same for all consumers in a perfectly competitive market
c. the quantity demanded of a commodity varies inversely with the price of the commodity, all other things remaining constant
Suppose Apple raises the cost of downloading a song from iTunes from $0.99 per song to $1.49 per song. This price increase will cause a(n) ________. A) increase in demand B) decrease in demand C) increase in quantity demanded D) decrease in quantity demanded
d. decrease in quantity demanded
Which of the following is a feature of a perfectly competitive market? A) There is only one seller of a commodity. B) The government rations commodities. C) The product of each seller differs marginally from its rival products. D) Each seller is too small to influence the market price.
d. each seller is too small to influence the market price
Which of the following is NOT a required characteristic of a market? A) A collection of economic agents (e.g., buyers and sellers) B) Trade or exchange of a good or service C) Rules and arrangements for trading D) Government setting the price of the good or service
d. gov setting the price of the good or service
Which of the following is TRUE of a market? A) A market must be under continuous surveillance and government control. B) A market always requires a specific physical location. C) Goods and services are exchanged at fixed prices in all markets. D) Price acts as a selection device for buyers and sellers in every market.
d. price acts as a selection device for buyers and sellers in every market
The quantity demanded of a good is ________. A) determined independently of the market price of the good B) always determined by government intervention C) the amount of the good that sellers are willing to supply at a given market price D) the amount of the good that buyers are willing to purchase at a given market price
d. the amount of the good that buyers are willing to purchase at a given market price
Which of the following statements correctly describes a competitive market? A) Buyers and sellers negotiate prices before making exchanges. B) The market price for the same good varies from seller to seller. C) A single seller sometimes has the ability to dictate the market price. D) The market price is determined by the interaction of demand and supply.
d. the market price is determined by the interaction of demand and supply
Explain the role of prices in a market.
markets use prices to allocate goods and services. prices act as a selection device that encourages trade between the sellers who can produce goods at low cost and the buyers who place a high value on goods.
Which of the following examples best approximates a competitive market? A) The market for F-35 fighter planes B) The market for Tesla electric cars C) The market for soybeans in the United States D) The market for Jackson Pollock paintings
the market for soybeans in the United States
Which of the following examples best describes the Law of Demand? A) When John's income doubles, his telephone bill also doubles. B) When the price of bread doubles, John's consumption of bread halves. C) When the price of watches increases, a local manufacturer starts offering more watches for sale. D) When a new anti-tobacco commercial is released, the consumption of tobacco products decreases sharply.
when the price of bread doubles, John's consumption of bread halves
