What is a market in the context of economics?

• An online platform for digital goods only

• A specific location for trading stocks

• Any location where buyers and sellers exchange goods and services

• A place where only financial transactions occur

What principle underlies the concept of voluntary exchange?

• Both parties involved must benefit financially

• Buyers and sellers willingly engage in transactions

• Exchanges can only occur in a physical marketplace

• All exchanges must be approved by a regulatory body

How do competitive markets allocate resources?

• Through government intervention

• By allowing monopolies to set prices

• Using price signals to guide resource distribution

• By limiting the production of goods

What is the law of demand?

• As price increases, demand decreases

• Demand is unrelated to price

• Demand remains constant regardless of price

• As price decreases, demand also decreases

What does the equilibrium price represent?

• The highest price a buyer is willing to pay

• The lowest price a seller is willing to accept

• The price at which quantity demanded equals quantity supplied

• A government-set price

How can external factors affect the supply and demand curves?

• They have no effect

• By making the curves linear

• By eliminating the curves entirely

• By shifting the curves left or right

Why might economists argue against government intervention in markets?

• It increases the supply of goods

• It can lead to inefficient resource allocation

• It stabilizes prices permanently

• It always benefits consumers

What is a potential ethical issue with a free market for human organs?

• It would increase altruistic donations

• It could reduce the number of organs available

• It might lead to exploitation of vulnerable groups

• It would make organs less expensive

How do economists propose increasing the supply of donated kidneys?

• By banning organ donations

• Creating kidney exchanges

• Mandating organ donation

• Through unregulated markets

Why are supply and demand not considered absolute laws?

• They apply only to certain goods

• They are influenced by human actions

• They are outdated concepts

• They are proven scientific facts