TEST on Ch6 - Version R (2021)

The monetary value of product as established by supply and demand.

• Price
• Rationing
• Rebate
• Economic Model
• Market Equilibrium

A situation in which prices are relatively stable, and the quantity of goods and services supplied is equal to the quantity demanded.

• Price
• Rationing
• Rebate
• Economic Model
• Market Equilibrium

A partial refund of the original price of a product.

• Price
• Rationing
• Rebate
• Economic Model
• Market Equilibrium

A system under which an agency such as a government decides every consumer’s fair share.

• Price
• Rationing
• Rebate
• Economic Model
• Market Equilibrium

A set of assumptions that can be listed in a table to help analyze behavior and predict outcomes.

• Price
• Rationing
• Rebate
• Economic Model
• Market Equilibrium

Concerning the Allocation Function of a Market Economy, how do Prices show COMPETITION? (Select ONE)

• A Price System can absorb the “shocks” of a market.
• Price is set due to competition between buyers and sellers, which is a price they can both live with.
• An agency such as the government decides everyone’s fair share.

Concerning the Allocation Function of a Market Economy, how do Prices show FLEXIBILITY? (Select ONE)

• Price is set due to competition between buyers and sellers, which is a price they can both live with.
• An agency such as the government decides everyone’s fair share.
• Prices are easy to adjust, and change often.

How does a Command Economy allocate scarce resources? (Select ONE)

• The government relies on a competitive market to help set prices and usage.
• Scarce resources are allocated to those consumers that can afford those goods and services.
• The government will set prices and amounts of usage for the economy.

In comparison to a Competitive Market, what is a major difficulty concerning Rationing? (Select ONE)

• High administrative costs.
• Negative impact on worker incentives.
• Surplus product available on the market.

For Consumers, what is a major difficulty concerning Rationing? (Select ONE)

• Negative impact on worker incentives.
• Determining what is someone’s fair share.
• Surplus product available on the market.