Chapter 11, Problem 1TY

You may use curves, schedules or economic theories and principles to justify your answer.  1.     Market is a medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange. The price that individuals pay during the transaction may be determined by a number of factors, but price is often determined by the forces of supply and demand. Markets do not necessarily need to be a physical meeting place. Cite at least five (5) examples of market trading that has no physical meeting and justify each example.   2.     What do you mean by the concept of utility? How this related to consumer taste and preferences? 3.      Discuss the four (4) types of market structures and cite at least two (2) example companies / industries in each type of market structure.

In a pure free-market: Question 7 options:   A) firms are guaranteed to survive since the government stands ready to subsidize losses.   B) firms can either make a profit, break even, or suffer losses since there are no guarantees of success.   C) firms seldom settle for the market price for their product since the law permits them to set their prices as they please. D) shortages and surpluses of goods are the norm since there is no way to get the cooperation of dozens of individual business people and thousands of customers since they can do as they please.

Identify the relevant economic concept which can be matched to the descriptions below. Simple give the question number and the relevant terms/ words in each case Q.1.1 Government sets a price level in a market that is aimed at assisting consumers Q.1.2 Quantity demanded is less than quantity supplied Q.1.3 A situation where the quantity supplied of a good is highly sensitive to a change in the price of the good Q.1.4 A curve showing combinations of two goods that provide a consumer with a constant amount of utility Q.1.5 The addition to total output when one more worker is hired, ceteris paribus