Unit 6 - Buyers and Sellers in Markets

Question 1

To figure out your economic profit of a situation, what two things must you subtract from your revenue?

Answer 1

Operational costs and opportunity costs

Question 2

what two types do economists break profits down into?

Answer 2

Accounting and economic

Question 3

what is profit derived from subtracting operating costs from revenue?

Answer 3

Accounting profit

Question 4

What profit is earned when there is zero economic profit and total revenues equal total profit?

Answer 4

Normal profit

Question 5

what are the four economic markets?

Answer 5

Perfect competition
Monopoly
Oligopoly
Monopolistic competition

Question 6

____________ exist when a firm or business has no competition in the manufacturing of a good or the providing of a service.

Answer 6

Monopolies

Question 7

________________ exists when there are many competitors in an industry with individual businesses producing different versions of a given product.

Answer 7

Monopolistic competition

Question 8

_______________ occurs frequently in a monopolistic competition market.

Answer 8

New competition

Question 9

In highly competitive markets, producers and consumers are likely to find an equilibrium where the quantity supplied is ________________ to the quantity demanded at the current price.

Answer 9

Exactly equal

Question 10

In order to be a perfectly competitive market, the five conditions must be met. What are the five conditions?

Answer 10

there must be many buyers and sellers
buyers and sellers must have perfect information
all producers are price-takers
sellers can enter the market freely
Sellers can exit the market freely

Question 11

Because products must be identical in order to have perfect competition, what must be the only significant factor in determining which seller a buyer wants to purchase from?

Answer 11

Price

Question 12

What four factors do sellers emphasize in non-price competition to promote their goods or services?

Answer 12

Quality
Brand reliability
Service level
Speed

Question 13

What is a market model where many firms and businesses compete against each other to create an innovative product at the best cost, which ultimately benefits society?

Answer 13

Perfectly competitive markets

Question 14

What is the MR=MC rule?

Answer 14

Marginal revenue = marginal cost

Question 15

What are the four different types of monopolies?

Answer 15

Natural monopoly
Geographic monopoly
Technological monopoly
Government monopoly

Question 16

The automobile industry is an example of what type of imperfect competition market?

Answer 16

Oligopoly

Question 17

What is the strategic planning and implementation process devised to entice consumers to purchase or engage with a particular product or service?

Answer 17

Marketing

Question 18

what is advertising?

Answer 18

persuasive audio or visual message used in marketing that promotes the sale of a product or service to a firm’s existing or potential consumers

Question 19

What are the steps in the multi-step process of advertising?

Answer 19

Research
Planning
Implementation
Measurement

Question 20

Most businesses utilize an ______________________ to reach their target market and establish or raise brand awareness.

Answer 20

Advertising campaign

Question 21

what is ROI?

Answer 21

Return on investment

Question 22

what percent of the global market does Pepsi control?

Answer 22

30%

Question 23

In 2014, what was Coca-Cola’s advertising budget?

Answer 23

$3.49 billion

Question 24

What was the first marketing plan that occurred between Coke and Pepsi during the Great Depression?

Answer 24

Pepsi started offering 12 oz bottles as compared to Coke only offering 6 oz bottles

Question 25

In what year did Coca-Cola come out with “New Coke”?

Answer 25

1985