Concepts Quiz ECON 302
Adam Smith's The Wealth of Nations was published in _____.
1776
In his book, Wealth of Nations, he argued that a free market system reduces waste and regulates the economy in the most efficient manner. He explained his ideas using the "invisible hand" theory.
Adam Smith
Which of the following is a problem for a free market economy?
Big gap between the poor and the wealthy
Adam Smith's idea that competition and a person's self-interest would regulate the economy without the need for government intervention. Group of answer choices
Free Market.
The invisible hand is associated helps explain what type of economic system?
Free markets
Which of the following is NOT one of the three economic questions every society has to answer?
How much to charge
Refers to the idea that the government should not be involved in the economic decisions, in other words it should "let it be".
Laissez Faire
How do people (households) in a market economy obtain income that is used to buy goods and services?
Supplying labor and other resources to firms.
In making any decision, sunk costs should be taken into consideration
false
The choices we make DO NOT impact the economy.
false
The concept of the Invisible Hand does not exist in a mixed market economy.
false
In the circular flow of a simple economy with only households and businesses:
households buy goods with income they earn from their resources.
Economic scarcity arises from:
limited resources and limitless wants
The study of the decisions of individual units in the economy is known as:
microeconomics
The item you GIVE UP when making a decision is called the ___________.
opportunity cost.
A command economy decides resource allocation by government planning and control. Group of answer choices
true
Economics is about more than just money.
true
Microeconomics and macroeconomics are not separate subjects, but rather complementary perspectives on the overall subject of the economy.
true
The Untied States is an example of a mixed market economy.
true
