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ADM 1340 Chapter Notes - Chapter 4: Shortage, Economic Equilibrium, Happy Hour

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grayalligator398

29 Jan 2014

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ADM 1340 Full Course Notes

ADM 1340 Full Course Notes

Document Summary

Part 2: supply and demand 1: how markets work. Market: group of buyers and sellers of a particular good or service. Price and quantity of ice cream sold are not determined by any single buyer or seller: price and quantity are determined by all buyers and sellers as they interact in the market-place. Example of perfectly competitive market: thousands of farmers who sell wheat millions of consumers who use wheat and wheat products. Or seller can influence the price of wheat, and. Each takes the price as given. ex: each seller of ice cream has limited control over the price because the sellers are offering similar products. A seller has little reason to charge less than the going price, and if he charge more, buyers will find other purchases. Monopoly: some markets have one seller and this seller sets the price. The demand curve: the relationship between price and quantity demanded.

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Related Questions

1. In a competitive market, the quantity of a product produced and the price of the product are determined by

a. buyers.

b. sellers.

c. both buyers and sellers.

d. None of the above is correct.

2. Which of the following statements is correct?

a. Buyers determine supply and sellers determine demand.

b. Buyers determine demand and sellers determine supply.

c. Buyers determine both demand and supply

d. Sellers determine both demand and supply

3. The demand for a good or service is determined by

a. those who buy the good or service

b. the government.

c. those who sell the good or service.

d. both those who buy and those who sell the good or service.

4. An increase in supply is represented by

a. a movement downward and to the left along a supply curve.

b. a movement upward and to the right along a supply curve.

c. a rightward shift of a supply curve.

d. a leftward shift of a supply curve

ceruleanseal203

Which of the following statements correctly describes a competitive market?

A) The market price for the same good varies from seller to seller.

B) Sometimes, a single seller has the ability to dictate the market price.

C) The market price is determined by the interaction of demand and supply.

D) Buyers and sellers negotiate prices before making exchanges.

orangemammoth983

Markets explained on the basis of supply and demand:

A. assume many buyers and many sellers of a standardized product.

B. assume market power so that buyers and sellers bargain with one another.

C. does not exist in the real-world economy.

D. are approximated by markets in which a single seller determines the price.