Answered: in the context of a market system,…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter7: Demand And Supply

Section: Chapter Questions

Problem 12AA

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Similar questions

Consider the following dialogue between two economics students, Yvette and Bob, after a recent economics lecture. YVETTE: Hi Bob. Today the professor said that the market decides how much of each good or service to produce. I don’t understand what that means. Nobody decides how many goods to produce. I’m so confused! BOB: Okay, I see where you are confused. Let’s run through it one more time. You are correct that in a market system, no one person decides what quantities of goods to produce in the economy, though that may be the case in other types of economic systems. In a market economy, output levels are determined by individual producers and consumers buying and selling goods. Suppose that in the market for smart phones, more smart phones were produced than consumers wanted to buy. In other words, smart phone producers have surplus smart phones that they cannot sell. ______ (options: Producers, Consumers) will _____ (options: lower, raise) the price of each smart phone…
Question 6 Discuss TWO major virtues of a market system.
Why is the right of private property an essential characteristic of a market system?
Be able to apply these concepts to all of the market structures: 1. Economically Efficient 2. Productively Efficient 3. Allocatively Efficient
What does the rise of alternative products like Puff Bar tell you about the overall role of market forces?
Why social optimal output more beneficial to society?
What defines market equilibrium? How about market disequilibrium? What are the contrasting proposition regarding economic efficiency and equity?
You have learned that the Law of Supply and Demand determines prices in a free-market system. Using a concrete example, describe how the Law of supply and demand works. (Hint: think about seasonal items or holiday-specific popular items, for instance).
What are some examples of a command economy? Market Economy?
One key feature of a market economy is price flexibility, which allows most prices to rise and fall to reflect the forces of supply and demand. True or false?
Describe an example where prices change people's behavior in efficient manners?
Why is private property, and the protection of property rights, so critical to the success of the market system? How do property rights encourage cooperation?

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in the context of a market system, which of the following statements is incorrect