Market Dynamics Quiz

How are prices determined in a market?

• Through supply and demand interactions

• By the number of consumers

• By the government

• Through the amount of advertising

What is the role of competition in markets?

• To increase prices over time

• To drive innovation and keep prices low for consumers

• To eliminate all sellers

• To reduce the number of buyers

What is collusion?

• A method to improve product quality

• An illegal agreement among firms to set prices or limit production

• A legal agreement to lower prices

• A strategy to increase production

Which of the following is NOT a phase of the business cycle?

• Expansion

• Hyperinflation

• Trough

• Peak

During the expansion phase of a business cycle, what occurs?

• Stock prices drop

• Consumer confidence increases

• Employment rates fall

• GDP decreases

During which phase of the business cycle does unemployment usually rise?

• Contraction

• Expansion

• Peak

• Trough

Turning point between expansion and contraction

• Recession

• Peak

• Decline

• Trough

Which market structure is dominated by a few large firms?

• Monopolistic competition

• Oligopoly

• Perfect competition

• Monopoly

All finished goods and services' monetary value

• Market Equilibrium

• Gross Domestic Product (GDP)

• Consumer Confidence

• Consumer Behavior

Lasting at least two quarters, what is the term for a decline in economic activity?

• Expansion

• Recession

• Peak

• Demand