A Basic Distinction in Types of Markets Is Between Markets

question 5

Multiple Choice

A basic distinction in types of markets is between markets that purchase the item for their own personal use and those that purchase the item for use either directly or indirectly in the production or distribution of other goods or services for resale. For example, when Logan stopped at the gas station to fill up his car before heading home for the weekend, they gas was for his personal use. However, when Brandon filled up his car with gas before a night of working as an Uber driver the gas was actually used to provide a service for sale. In this case, gas was:

• A) a consumer product for Logan and a business product for Brandon.
• B) a marketing product for Logan and a commercial good for Brandon.
• C) a consumer product for Logan and a business product for Brandon
• D) gasoline is always a consumer product by definition.

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Definitions:

Coupon Bonds

Debt securities that pay holders a fixed interest rate (the coupon) on a periodic basis until the bond matures, at which point the principal amount is repaid.

Par

The face value of a bond or other financial instrument, typically the amount at which it will be paid out upon maturity.

Yield

The earnings generated from an investment, including interest or dividends, that result from owning a specific financial instrument.

Premium Bond

A bond sold for more than its face value, typically occurring when its interest rate is higher than the current market rate.