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

Many of India's most talented people move to countries where doing business is easier than in India. Talented people leaving their own countries for countries where doing business is easier or where their job skills are in greater demand is known as

Scenario 6.1: Tasha and Gloria are friends who each produce beaded headbands. Each can choose to work somewhat hard and expend $10 worth of effort, or can work extremely hard and expend $15 worth of effort. If either works somewhat hard, she can produce headbands that sell for a total of $22. If either works extremely hard, she can produce headbands which sell for a total of $30. Both Tasha and Gloria are equally good at making beaded headbands. -Refer to Scenario 6.1. If both Tasha and Gloria play their dominant strategies, Tasha's net payoff will be ________ and Gloria's net payoff will be ________.

If consumers suddenly decide they no longer want to purchase hybrid vehicles, the price of hybrid vehicles will likely ________ and producers will ________ production.

Coal is very useful in the production of electricity. Red beryl, although not generally considered as very useful, is a beautiful gemstone found in the mountains of Utah, and has been described as 1,000 times more valuable than gold. Explain why red beryl costs so much more than coal.

Price fixing tends to result in ________ prices and ________ society's wealth.

The ground rules, customs, and conventions that govern the behavior of market participants are known as ________.

Markets are forums where buyers and sellers conduct transactions.

In a society where government mandates that everyone shares the product of one's hard work with everyone else, people will tend to work harder than they would if they could keep the full product of their work.

Scenario 6.1: Tasha and Gloria are friends who each produce beaded headbands. Each can choose to work somewhat hard and expend $10 worth of effort, or can work extremely hard and expend $15 worth of effort. If either works somewhat hard, she can produce headbands that sell for a total of $22. If either works extremely hard, she can produce headbands which sell for a total of $30. Both Tasha and Gloria are equally good at making beaded headbands. -Refer to Scenario 6.1. The dominant strategy is for Tasha to work ________ and for Gloria to work ________.