Question :
4.1 Markets
1) A(n) ________ a group of buyers and sellers : 1377320
4.1 Markets
1) A(n) ________ is a group of buyers and sellers who are trading goods and/or services.
A) firm
B) market
C) enterprise
D) government
2) Which of the following correctly explains the role of the government in a free market?
A) The government sets production quotas for sellers in the market.
B) The government sets prices according to the relative value of each good.
C) The government allocates goods to those buyers who value the goods the most.
D) The government acts as a referee by enforcing contracts and preventing stealing.
3) A free market is a market:
A) that operates with little or no government control.
B) where almost all exchanges take place involuntarily.
C) which has price controls imposed by a ruling authority.
D) where determination of equilibrium quantity is free from the forces of demand and supply.
4) In a competitive free market:
A) all exchanges take place involuntarily.
B) there is only one seller and many buyers.
C) the government does not impose price controls.
D) there is no provision for the protection of property rights.
5) 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.
6) Suppose the market for cement is such that the government does not interfere in price determination but plays an important role in the provision of property rights. 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 free and 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.
7) Assume that a seller in a perfectly competitive market charges more than the equilibrium price. It is likely that this seller will:
A) increase his profit.
B) increase his sales.
C) lose only a few buyers.
D) lose almost all of his buyers.
8) A seller who is a price-taker charges:
A) the market price.
B) above the market price.
C) below the market price.
D) different prices to different buyers.
9) 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) Commodities are auctioned to the highest bidder.
D) Each seller is too small to influence the market price.
10) 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) Sometimes, a single seller has the ability to dictate the market price.
D) The market price is determined by the interaction of demand and supply.
11) Define free markets. Does a perfectly competitive market qualify as a free market?
