When More Is Less LAP Quiz

1. An item’s actual price that prevails in the marketplace at any particular moment defines

• 1. market price.

• 1. fair price.

• 1. economic worth.

• 1. marginal cost.

1. Market-clearing price can best be defined as the

• 1. amount the seller must earn to make a profit.

• 1. price at which customers will buy the same amount that producers supply.

• 1. amount of satisfaction a product provides a consumer.

• 1. price at which an item regularly sells in the competitive marketplace.

1. If customers feel that a product’s price is too high, they will probably

• 1. make a formal complaint.

• 1. try to negotiate the price.

• 1. buy less of the product.

• 1. call the Better Business Bureau.

1. Which of the following is most likely to affect the selling price of roses:

• 1. A large number of rose bushes are killed by disease.

• 1. Plants and small shrubs are also sold at the flower shop.

• 1. The flower shop also carries silk flowers.

• 1. A reorder shipment of roses arrives.

1. Which of the following is an external factor that affects market price:

• 1. Number of items in stock

• 1. Available credit terms

• 1. Consumer buying power

• 1. Location of item in store

1. Which of the following is not a function of relative prices:

• 1. Information

• 1. Rationing

• 1. Incentives

• 1. Production

1. The market’s way of rationing limited resources, goods, and services to consumers in a market economy is through

• 1. profits.

• 1. prices.

• 1. incentives.

• 1. commissions.

1. What does the interaction of supply and demand determine in a market economy?

• 1. Price

• 1. Production

• 1. Cost

• 1. Profit

1. The price consumers are willing to pay for a product indicates their estimate of a product’s

• 1. advertising.

• 1. markup.

• 1. value.

• 1. profitability.

1. What is the ratio of a pound of yellow squash at $ .40 per pound and a pound of butternut squash at $1.20 per pound?

• 1. 1 to 3

• 1. 1 to 4

• 1. 1 to 2

• 1. 1 to 1