Chapter 8 - The Economics of Supply & Demand (SEM)

Which of the following is NOT an accurate statement based on the laws of supply and demand?

• When the supply of a product increases, prices tend to fall.

• When demand for a product goes up, prices can be set higher.

• The price point at which supply and demand are equal is said to be the equilibrium point.

• When demand for service goes down, a business will increase prices to make up for the loss of sales.

Advertising a product for a great price and then not having it available for consumers to purchase is part of which practice?

• price fixing

• none of the above

• bait & switch

• price discrimination

Which of the following allows consumers to negotiate prices?

• psychological pricing

• promotional pricing

• one-price policy

• flexible pricing promotion

Which of the following statements is true regarding markup?

• Markup does not take into account the profit you want to make.

• Markup must be sufficient to cover operating expenses and allow profit.

• Markup is not affected by operating expenses.

• None of the above.

The business cycle

• does not greatly affect sports and entertainment businesses.

• is a well-defined, predictable pattern in the U.S. economy.

• refers to the ups and downs of the economy.

• all of the above

Which of the following is characteristic of the expansion phase of the business cycle?

• less discretionary income

• decreased competition

• increased consumer demand

• growing unemployment

Which of the following practices is restricted by law?

• price fixing

• price discrimination

• bait & switch

• all the above

The downside of the business cycle, when the economy slows down and unemployment goes up, is called

• inflation

• contraction

• peak

• expansion

Occurs when related businesses conspire to charge high prices.

• markup

• price fixing

• scarcity

• price lines

The lack of resources

• scarcity

• shoulder period

• inflation

• law of supply