Exam 6: The Market System: Functions, Structure, and Institutions

Which of the following would not be covered by copyrights?

Prices help coordinate all phases of production so producers have the right quantities of resources they need, in the right place, to operate.

________ refers to an increase in the total value of the goods and services an economy produces each year.

A market structure where many sellers offer differentiated products is called perfect competition.

Balthazar and Artemis are cousins who grow stick cactus in adjacent plots. Each can choose to work somewhat hard and expend $200 worth of effort, or can work extremely hard and expend $300 worth of effort. If either works somewhat hard, he can produce stick cactus that sell for a total of $650. If either works extremely hard, he can produce stick cactus which sell for a total of $800. Both Balthazar and Artemis are equally good at growing stick cactus. a. What is the dominant strategy for Balthazar and for Artemis? b. If both play their dominant strategies, what is the net payoff for each cousin? c. Is there a Nash equilibrium, and if so, what is it?Now assume the cousins are forced by government to combine their plots and share what they make. d. What is the dominant strategy for Balthazar and for Artemis? e. If both play their dominant strategies, what is the net payoff for each cousin? f. Is there a Nash equilibrium, and if so, what is it? g. How did this change in property rights affect each cousin's incentive to work, and what happens to the economic pie?

The form of economic organization in which productive resources are privately owned by individuals, and those individuals independently decide what to produce is called

If consumers suddenly have a greater desire for energy drinks, the price of energy drinks will likely ________ and producers will ________ production.

When there are many producers of an identical product and you have perfect and free information about what every seller is charging, eventually every merchant will

The ________ a good or service is, the ________ its price is likely to be.

List the four ground rules for a well-functioning market.

The United States Postal Service (USPS) is the only organization allowed to deliver first-class mail in the United States. The market structure that best fits the USPS is probably

The wheat growing industry consists of very many farmers producing identical products. The market structure that best fits the wheat growing industry is probably

All of the following could be covered by patent protection except

Prices are a critical component of the market system.

In the U.S. economy, the quantity of donuts produced each day is determined by the

Information facilitates exchange by fostering competition.

A market dominated by a few large sellers who sell identical or differentiated products is called

Property rights connect effort with reward.

If markets are left to their own devices, the ________ a good or service is desired by buyers, the ________ its price will be.

When the Pilgrims first arrived in North America, they established communal ownership of all pastures and of all agricultural production. As is common with communal ownership, this communal ownership by the Pilgrims resulted in