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EC120 Chapter Notes - Chapter 4: Fudge, Economic Equilibrium, Frozen Yogurt

60 views7 pages
plumbeaver231
17 Oct 2012
School
WLU
Department
Economics
Course
EC120
Professor
Peter Sinclair

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Document Summary

Supply and demand are the two words that economists use the most often. Supply and demand forces are what make market economies work. They determine the quantity of each good produced and the price at which it is sold. Market-a group of buyers and sellers of a particular good or service. The buyers as a group determine the demand for the product and the sellers determine the supply of the product. Markets can either be highly organized (agricultural market) or less organized (ice cream market) Competitive market-a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. Each buyer knows that there is several places to get a particular product and that each product will vary only slightly. Therefore the quantity and price is not determined by a single buyer or seller but rather by all buyers and sellers.

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Related Questions

A competitive market is one in which:

a. is only one seller, but many buyers.Ā 

b. are many sellers, and each has the ability to set the price of his product.Ā 

c. are many sellers and compete with one another in such a way that some sellers are always being forced out of the market.Ā 

d. are so many buyers and so many sellers that each has a negligible impact on the price of the product.Ā 

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.

Ā 

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

Ā 

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.

Ā 

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

A competitive market is a market in which:

1.Ā there are only a few sellers.

2.Ā the forces of supply and demand do not apply.

3.Ā an auctioneer helps set prices and arrange sales.

4.Ā no individual buyer or seller has any significant impact on the market price.