Market Concepts Quiz

A group of buyers and sellers of a particular good or service is called

• a coalition.

• an economy.

• a market.

• a competition.

Which of the following is not an example of a market?

• A small town has only one seller of water.

• In the United States, a sick person cannot legally purchase a lung.

• In California, there are many buyers and sellers of avocados.

• The availability of internet shopping has expanded the shoe choices for buyers who do not live near large cities.

A competitive market is a market in which

• an auctioneer helps set prices and arrange sales.

• there are only a few sellers.

• the forces of supply and demand do not apply.

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

Assume Kalene buys notebooks in a competitive market. It follows that

• Kalene has a limited number of sellers from which to buy notebooks.

• Kalene will negotiate with sellers whenever she buys notebooks.

• Kalene cannot influence the price of notebooks even if she buys a large quantity of them.

• Kalene might have trouble finding notebooks at her local store.

If a seller in a competitive market chooses to charge more than the going price, then

• the sellers' profits must increase.

• the owners of the raw materials used in production would raise the prices for the raw materials.

• other sellers would also raise their prices.

• buyers will make purchases from other sellers.

Which of the following is not a characteristic of a perfectly competitive market?

• There is free entry and exit.

• There are many buyers and sellers.

• Sellers must accept the price the market determines.

• Different sellers sell differentiated products.

An example of a perfectly competitive market would be the

• cable TV market.

• soybean market.

• breakfast cereal market.

• shampoo market.

A monopoly is a market with one

• seller, and that seller is a price taker.

• seller, and that seller sets the price.

• buyer, and that buyer is a price taker.

• buyer, and that buyer sets the price.

The quantity demanded of a good is the amount that buyers are

• willing to purchase.

• willing and able to purchase.

• willing, able, and need to purchase.

• able to purchase.

A decrease in the price of a good will

• increase demand.

• decrease demand.

• decrease quantity demanded.

• increase quantity demanded.