Microeconomics Decision-Making Units Quiz

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Questions and Answers

Which one of the following best defines a firm in a market economy?

  • A person who organizes, manages, and assumes the risks of a firm
  • The consuming units in an economy
  • The amount of some good or service consumers are willing and able to purchase at each price
  • The primary producing units in a market economy (correct)

Which one of the following best defines a household in an economy?

  • The amount of some good or service consumers are willing and able to purchase at each price
  • The primary producing units in a market economy
  • A person who organizes, manages, and assumes the risks of a firm
  • The consuming units in an economy (correct)

What determines a household's decision about the quantity of a particular output to demand?

  • The income of the household
  • The number of buyers and sellers in the market
  • The risks associated with the firm
  • The price of the product in question (correct)

Which one of the following characteristics defines a competitive market?

<p>Identical goods or services (A)</p> Signup and view all the answers

What is the role of markets in facilitating transactions between buyers and sellers?

<p>Completing transactions (D)</p> Signup and view all the answers

Which one of the following best defines demand?

<p>The amount of goods or services consumers are willing and able to purchase at each price (B)</p> Signup and view all the answers

What is the role of an entrepreneur in a firm?

<p>To organize, manage, and assume the risks of a firm (B)</p> Signup and view all the answers

What determines a household's decision about the quantity of a particular output to demand?

<p>The price of the product in question (B)</p> Signup and view all the answers

Which one of the following is a characteristic of competitive markets?

<p>Identical goods or services (B)</p> Signup and view all the answers

What is the primary role of markets in an economy?

<p>To facilitate the interaction of buyers and sellers (D)</p> Signup and view all the answers

Flashcards

Firm

Primary producing units in a market economy.

Household

Consuming units in an economy.

Demand Determinants

Household's quantity demanded is primarily influenced by price.

Competitive Market

Market characterized by identical goods or services.

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Market Role

Markets complete transactions between buyers and sellers.

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Demand

Amount of goods/services consumers are willing and able to purchase at each price.

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Entrepreneur's Role

Organizes, manages, and assumes risks of a firm.

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Market Interaction

Primary role of markets is to facilitate buyer-seller interactions.

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Price Impact

Price impacts household demand and purchasing decisions.

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Identical Goods

Goods that are the same across sellers in a competitive market.

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