Test Bank For Brief Principles of Macroeconomics 10th Edition

1. Prices allocate a market economy’s scarce resources.

  a.  True

  b.  False

ANSWER:   True

2. In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

  a.  True

  b.  False

ANSWER:   True

3. A market is a group of buyers and sellers of a particular good or service.

  a.  True

  b.  False

ANSWER:   True

4. Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

  a.  True

  b.  False

ANSWER:   False

5. A yard sale is an example of a market.

  a.  True

  b.  False

ANSWER:   True

6. A newspaper’s classified ads are an example of a market.

  a.  True

  b.  False

ANSWER:   True

7. Most markets in the economy are highly competitive.

  a.  True

  b.  False

ANSWER:   True

8. In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

  a.  True

  b.  False

ANSWER:   True

9. In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

  a.  True

  b.  False

ANSWER:   False

10. In a perfectly competitive market, the goods offered for sale are all exactly the same.

  a.  True

  b.  False

ANSWER:   True

11. In a perfectly competitive market, buyers and sellers are price setters.

  a.  True

  b.  False

ANSWER:   False

12. All goods and services are sold in perfectly competitive markets.

  a.  True

  b.  False

ANSWER:   False