Suppose That the Average Price of a Piece of Jewelry

question 34

Multiple Choice

Suppose that the average price of a piece of jewelry at Henry's Jewelers is $200, and Mr. Smith wants to spend approximately that much for his wife's birthday gift. Under what circumstances can Mr. Smith be reasonably assured of a selection of jewelry in his price range?

• A) The average is a mean.
• B) The jeweler has a reputation for selling quality merchandise.
• C) The average is a modal average.
• D) The average is a median.
• E) The pieces of jewelry are reasonably priced.

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Definitions:

Economic Activity

Activities related to the creation, distribution, and use of goods and services in an economic system.

Market Economy

An economic system in which economic decisions and the pricing of goods and services are guided solely by the interactions of citizens and businesses.

Equilibrium Quantity

At the market equilibrium price, the amount of goods or services that are supplied matches the amount that is demanded.

Equilibrium Price

A pricing point in the market where the supply of goods meets the demand for those goods.