CHAPTER 2 The Market System and the Circular Flow individual products to make them and offer them for sale? Ho*- did the producers decide on the best combinations of and resources to use? Who made those resources available' *'hv? Who decides whether these particulartrardware produc-s should continue to be produced and offered for sale? 11. \4rhat is meant by the term "creative destrucdon"? How does idea? the emergence of mpl (iPod) technology relate to this 12. b asentence, describe the meaning of the phrase "invisible hand." 13. - In market I 43 I the economies input availability is a constant concern' Why difference? product 14. Distinguish between the resource market and the ,nr.t "i in the circular flow model' In what way are busi- both sellers and buyers in this model? 14/hat are the flows in the circular flow model? re15. LAST woRD What explains why millions of economic productively and sources tend to get airanged logically rather than haphazardly and unproductively? nesses and households economies, firms rarelyworrJ' about the availability of inputs to produce their proiucts, whereas in command Web-Based Questions 1. DIAMoNDS-INTERESTED lN BUYING oNE? Go to the Internet auction site eBay at wv.'w'ebay'com and select and Watches and then Loose Diathe category Jewelry monds ,-nd'G"*rtorres. How many loose diamonds are for sale at the moment? Note the wide array of sizes and prices of the diamonds' In what sense is there competi[ior, ,t torrg the sellers in these markets? How does that comcompetitio-n influence prices? In what sense is there influp"tit'ion among bryersi How does that competition ence prices? 2. or BARTER AND THE tRS Bartering occurs when goods For services are exchanged without the exchange ofmoney' some, barter's popularity is that it enables them to avoid paying tr*i, to the government' How might such (IRS)' avoidance oJcur? Does the internet Revenue Service nontaxable or taxable as barter ffeat www.irs.ustreas.gov/, income? (T1pe "6arter" in the site's search tool') How is the value #a barter transaction determined? What are of some IRS barter examples? What does the IRS require the members of so-called barter exchanges?