1. When buyers and sellers interact in free-market systems, A. they are interact
ID: 1133601 • Letter: 1
Question
1. When buyers and sellers interact in free-market systems,
A. they are interacting in a Negative Sum environment where the gains of the sellers come from exploiting the buyers.
B. they are interacting in a Positive Sum environment. This permits both buyer and seller to "win" when a transaction takes place.
C. the end result only benefits the buyers since they get a price below their reservation price.
d. the end result only benefits the sellers since they get a price above their reservation price.
2. The Law of Demand:
a. is based on the behavior of the New Soviet Man that Marxists believed would come into existence after socialism was up and running.
b. exists due to self-interest, and therefore must be immoral.
c.
underlies the Supply curve and explains its upward slope.
D. underlies the Demand Curve and explains its downward slope.
underlies the Supply curve and explains its upward slope.
D. underlies the Demand Curve and explains its downward slope.
Explanation / Answer
1) The Answer is B-) they are interacting in a Positive Sum environment. This permits both buyer and seller to "win" when a transaction takes place.
because, a free-market system is the market, where there is no intervention of any government or any government bodies. so that buyers and seller meet and trade with mutual understanding.
2) The answer is D -) underlies the Demand Curve and explains its downward slope
the law of demand states, all things held constanst, if the price of a product increase, quantity demand decreases. demand curves sloping downward showing the negative relationship of price and quantity demanded.
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