Econ Chapter 2
in most mixed economies, the government does NOT a. purchase land, labor, and capital from households in the factor market b. own all the property and confiscate all economic output c. purchase goods and services in the product market d. redistribute wealth through taxes and other means
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
which of the following is NOT a disadvantage of a centrally planned economy a. it usually cannot meet consumers' needs and wants b. it tries to meet explicitly stated goals c. it does not reward innovation d. it sacrifices individual freedoms
b
why are free market economies able to attain economic growth a. consumers can purchase all the goods they need, which causes firms to produce more b. competition encourages innovation, which causes growth c. everyone is acting in their own self-interest, which motivates market growth d. firms keep producing more incentives to encourage households to purchase more goods
b
an economy controlled by the government is ______ planned
centrally
how does our government get involved in our economy
collecting taxes
the power of individuals to decide what gets produced is _____ sovereignty
consumer
households own the ?
factors of production
each society determines who will consume what is produced based on a. its unique combination of social values and goals b. the amount of factor payments c. its needs and wants d. economic equity
a
how did collectives in the soviet union avoid the competition that drives a free market economy a. there were no incentives for competition because the government determined prices, wages, and products d. the farmers were not able to sell their own products c. heavy industry was not a direct competitor d. it was illegal to buy products from a competitor
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 if it is of lower quality b. the negative incentive will cause consumers to purchase less of the good or service if it is of higher quality
a
why might a socialist society have a less rigid command economy than a communist society a. in a socialist society, various political systems may be combined with public control of the economy b. in a socialist society, all economic and political power rests in the hands of the central government c. in a socialist society, the centers of economic power are under private control
a
an economy in which only the government makes economic decision is a a. mixed economy b. traditional economy c. centrally planned economy d. market economy
c
government intervention in a modern economy is useful because a. the needs and wants of modern society are always met by the marketplace b. the marketplace has many incentives to create public works such as parks and libraries c. governments are more able to meet some needs and wants of modern society in a way the ensures that all members of society can participate d. the marketplace provides all of its own laws
c
pure market economies always a. allow the central government to make economic decision b. make fair or efficient decisions or allow for growth c. base economic decisions on exchange or trade d. divide work along gender lines
c
the united states government intervenes to a. provide competition for private firms b. impose barriers on foreign trade c. keep order, provide vital services, and promote the general welfare d. restrict the banking industry
c
which of the following is NOT an advantage of the free market a. economic efficiency b. economic freedom c. economic equity d. economic growth
c
who decided what the framers would produce on soviet collectives a. the farmers b. the military c. the government d. the consumers
c
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
the united states economy is a mixed economy a. based on the principles of the traditional economy, but allowing some government intervention b. based on the principles of the centrally planned economy, but limiting government intervention c. based on the principles of the free market, allowing no government intervention d. based on the principles of the free market, but allowing some government intervention
d
traditional economies are usually a. small, close communities that welcome change and new technology b. large, widespread communities that welcome change and new technology c. large, widespread communities that are able to deal effectively with environmental disaster d. small, close communities that avoid change and new technology
d
what "invisible hand" regulates the free market economy a. incentives and efficiency b. specialization c. competition between firms d. competition and self-interest
d
government makes limited intervention under free _____
enterprise
what are two of the freest markets in the world
hong kong and singapore
in the factor market, the government acquires land and capital from _______
households
who owns the factors or production
households
under communism, workers fail to increase production because they lack an ____
incentive
in what ways does the government use tax dollars
medicare, medicade, social security, public education, public goods
income people receive for supplying land, labor, or capital is called factor ______
payments
who does the government collect taxes from
people and businesses (households and firms)
households purchase goods and services in the ____ market
product
what two things form the invisible hand
self-interest and competition
the philosophy advocating equal distribution of wealth is ____
socialism
a developing nation switching from government to individual ownership of industry is in _______
transition