Question

prices
directions: fill - in - the - blank enter the appropriate word(s) to complete the statements.

1. price is defined as the __________ value of an object.
2. prices help an economy function by implying the __________ of resources.
3. a particular price on an item might provide a(n) __________ for a change in economic behavior by a buyer or seller.
4. in a competitive market economy, prices are __________ because they favor neither the producer nor the consumer.
5. __________ is a method by which the government allocates goods and services without prices.

directions: multiple choice indicate the answer choice that best completes the statement or answers the question.

1. which rationing method was instituted for gasoline in the mid - 1970s?

a. distribution of ration vouchers
b. administration of gas sales through post offices
c. manufacturing of more fuel - efficient automobiles
d. purchasing days determined by license plate numbers

1. which of these best describes prices in a market economy?

a. a signal for consumers to purchase less
b. a signal for producers to manufacture less
c. a set of compromises between buyers and sellers
d. a set of compromises between the government and citizens

1. why does an increase in gas prices lead to less consumer spending on other items?

a. the price of gas is largely elastic.
b. the price of gas is largely inelastic.
c. the demand for gas is largely elastic.
d. the demand for gas is largely inelastic.

1. which of these events sparked the most extensive rationing in united states history?

a. world war ii
b. hurricane sandy
c. the 1970s energy crisis
d. the 1999 baltimore orioles exhibition game

1. which of these is a major problem in the execution of a rationing system?

a. market spikes
b. price neutrality
c. price flexibility
d. administrative expense

Explanation:

1. Price is defined as the monetary value of an object.
2. Prices are a key function by implying the scarcity of resources.
3. A particular price on an item might provide an incentive for a change in economic behavior by a buyer or seller.
4. In a competitive market economy, prices are neutral because they favor neither the producer nor the consumer.
5. Rationing is a method by which the government allocates goods and services without prices.
6. The rationing method instituted for gasoline in the mid - 1970s was purchasing days determined by license plate numbers. So the answer is D.
7. Prices in a market economy are a set of compromises between buyers and sellers. So the answer is C.
8. An increase in gas prices leads to less consumer spending on other items because the demand for gas is largely inelastic. So the answer is D.
9. The 1970s energy crisis sparked the most extensive rationing in United States history. So the answer is C.
10. A major problem in the execution of a rationing system is administrative expense. So the answer is D.

Answer:

1. monetary
2. scarcity
3. incentive
4. neutral
5. Rationing
6. D. purchasing days determined by license plate numbers
7. C. a set of compromises between buyers and sellers
8. D. The demand for gas is largely inelastic
9. C. the 1970s energy crisis
10. D. administrative expense