Pricing

What can affect the prices for some items in a market economy?

• Weather
• Strikes
• Natural disasters
• All of the above

What happens when unforeseen events such as weather, strikes, natural disasters affect the prices for some items?

• Buyers stop buying and sellers stop selling
• Buyers and sellers demand government intervention
• Buyers and sellers react to the new level of prices and adjust their consumption and production accordingly
• Buyers and sellers ignore the new level of prices

How can prices be determined in a market economy?

• Through competition between buyers and sellers
• By the government
• By large companies
• All of the above

What does a high price signal in a market economy?

• For buyers to stop buying
• For producers to stop production
• For producers to produce less and for buyers to buy more
• For producers to produce more and for buyers to buy less

How are prices related to each other in a market economy?

• They are related by quantity
• They are related by quality
• They are not related
• They are related by price

How can the government set prices in a market economy?

• For public services
• For all goods and services
• The government cannot set prices
• For private services

What is the relationship between demand, prices, and profits?

• If demand increases prices rise, profits expand, new investment is attracted
• If demand increases prices fall, profits shrink, new investment is repelled
• If demand decreases prices fall, profits shrink, new investment is repelled
• If demand decreases prices rise, profits expand, new investment is attracted

How do supply and demand affect prices in a market economy?

• They have no effect on prices
• They only affect the supply of goods
• They only affect the demand for goods
• They determine the price of goods

What is market equilibrium?

• A situation where prices are relatively stable and there is neither a surplus nor a shortage in the market
• A situation where prices are constantly changing
• A situation where there is a surplus in the market
• A situation where there is a shortage in the market

What role do prices play in a market economy?

• What role do prices play in a market economy?
• They are irrelevant
• They act as signals
• They are set by the government