Econ Chapter 2
On which arrow(s) would weekly grocery shopping fall? a. a and b b. a c. c d. a and d
A
Which of the following best describes the physical flow from households to firms shown in the diagram ? a. interest and profits b. labor and land c. goods and services d. wages and salaries
B
Which of the following is characteristic of a centrally planned economy? a. The central government enforces laissez-faire policies. b. The central government makes all economic decisions. c. The central government lets factories set their own goals. d. The central government allows the market to set wages for jobs.
B
Which of the following philosophers argued that a free market would regulate itself with little government involvement? a. Karl Marx b. Adam Smith c. Vladimir Lenin d. Friedrich Engels
B
Who owns the factors of production? a. individuals b. households c. firms d. the market
B
Why are free market economies able to grow? a. Consumers can buy all needed goods. b. Competition encourages innovation. c. Everyone acts in their own interest. d. Firms keep producing incentives.
B
A family buys groceries twice a week. Which arrow or arrows describe this? a. a and b b. a c. c d. a and d
A
Each society answers the three basic economic questions based on a. its unique combination of values and goals. b. the number of factor payments. c. its degree of economic growth. d. the desire to achieve economic freedom.
A
How will consumers react to the incentive of a higher price on a good or service? a. The negative incentive will cause consumers to purchase less of the good or service. b. The positive incentive will cause consumers to purchase less of the good or service. c. The negative incentive will cause consumers to purchase more of the good or service. d. The positive incentive will cause consumers to purchase more of the good or service.
A
Which of the following is the main incentive for a manufacturer to sell a product? a. making profits on sales b. putting others out of business c. pleasing the consumer d. helping the economy grow
A
How is China's economic system today different from the one in Soviet Russia? a. It does not own major firms. b. It allows more economic freedom. c. It is socialist, not communist. d. It is not centrally planned.
B
The ways in which factors of production are combined determines the answer to which economic question? a. What will be produced? b. How will goods be produced? c. Who will consume goods? d. How can we provide a safety net?
B
To improve its standard of living, a nation's economy must a. remain stable. b. grow through innovation. c. reach economic equity. d. allow the central government to make economic decisions.
B
What does the process of specialization do for an economy? a. It eliminates unemployment. b. It makes production more efficient. c. It fosters competition. d. It makes labor easier to control.
B
What must a nation's economy do in order to improve the standard of living? a. remain stable b. grow c. reach economic equity d. allow central planning
B
Why do people need to buy and sell products or services? a. People need to buy and sell products to make a profit. b. We need to maintain a competitive society. c. No one is self-sufficient. d. People need to provide the market with goods and services.
C
Why does the U.S. government intervene in the economy? a. to compete with private firms b. to limit foreign trade c. to promote the general welfare d. to restrict the banking industry
C
How is the U.S. government involved in the factor market? a. It buys paper from firms. b. It purchases telephones and computers. c. It tells businesses and firms what to purchase. d. It pays wages to government employees.
D
Which of the following is a summary of the three key economic questions? a. Who will buy which goods and services, and how much will they pay? b. How, when, and from whom should consumers get what they want? c. When, where, and by whom should goods and services be produced? d. What goods and services should be produced, how, and for whom?
D
Why might the Soviet planners have favored heavy industry over the makers of consumer goods? a. The products of heavy industry brought in more money. b. There were more people trained to work in heavy industry. c. Consumer goods are not good economic investments. d. The products of heavy industry provide material for many other industries.
D