econ 221

Freedom of entry and exit of producers enables an economy to adjust to changes in which of the following areas

-Consumer tastes -Resource availability -Technology

Which of the following does competition require?

-Freedom of sellers and buyers to enter or leave markets -Two or more buyers and two or more sellers acting independently in a particular market

Human specialization or division of labor contributes to a society's output in which of the following ways?

-Specialization makes use of differences in ability. -Specialization fosters learning by doing. -Specialization saves time.

Which of the following best describe the reasons that specialization increases the total output society derives from limited resources?

-Specialization saves time. -Specialization fosters learning by doing. -Specialization makes use of differences in ability.

Which of the following correctly states why advanced technology and capital goods are important? (Check all that apply.)

-The most direct methods of producing a good or service are often the most efficient. -The new technology can enhance the productivity of workers

Competition among economic units ______

-implies that producers can enter or leave an industry -diffuses economic power within the businesses and households that make up the economy.

Which of the following does competition imply

-it enables the economy to adjust to changes in consumer tastes, technology, and resource availability -it provides the economy with the flexibility needed to remain efficient over time -no insurmountable barriers prevent an industry from expanding or contracting

Private individuals and businesses are able to utilize property as they wish as a result of:

-the ability to negotiate legally binding contracts. -the right of private property

In order to have competition in a market economy, there must be at least _____ or more sellers acting independently in a particular market.

2

Which of the following ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services?

Freedom of enterprise

Which of the following is true when there are many buyers and sellers acting independently in a market

No single buyer or seller can dictate the price of the product or resource because others can undercut that price.

_________ (one word) is the use of resources by an individual, firm, region, or nation to produce one or a few goods or services rather than the entire range of goods and services.

Specialization or Specialize

______ increases the total output society derives from ______ resources

Specialization; scarce

Which of the following is the most efficient method of production?

Using a combination of labor, capital and technology

A trading system that involves swapping goods for goods and requires a coincidence of wants between the buyer and the seller is called ______.

barter

The basis of competition is freedom of ______ exercised in the pursuit of ______.

choice; money

Communism exhibits all the characteristics of a ______ system

command

The market system depends on ______ both among buyers and among sellers

competition

Two or more buyers and two or more sellers acting independently in a particular product market with the freedom to enter and leave the market best describes ______.

competition

A(n) ______ system is a particular set of institutional arrangements and a coordinating mechanism that responds to the economizing problem.

economic

The most important consequence of property rights is that they ______.

encourage cooperation by ensuring that only mutually agreeable economic transactions take place

Freedom of _______ ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services.

enterprise

The title to an automobile or the deed to a cattle ranch assures a buyer that the seller is the legitimate owner of that property. This is an example of property rights _________.

facilitating exchange

True or false: Competition among sellers and government diffuses economic power within the economic units that make up an economy.

false

True or false: Specialization means using available resources to produce a variety of goods and services.

false

In a _______ system, people act in their own self-interest.

market

Under the market system, ______ coordinate the decisions made by households and businesses

markets and prices

Money performs several functions, but first and foremost it is a ______.

medium of exchange

What is the coordinating mechanism in a market system? Multiple choice question.

prices

______ ownership of capital gives capitalism its name. Multiple choice question.

private

_______ property rights help to facilitate exchange in a free market system.

private

The interaction between buyers and sellers in a market system determines ______.

product and resource prices

When every economic unit in a society attempts to achieve its own particular goal, usually requiring delivering something of value to others, it is referred to as ______.

self-interest

Rather than produce a wide array of goods and services, it is more efficient for economies to produce goods and services based upon ______

specialization

The goods and services produced by an economic unit through ______ can be exchanged for a full range of desired products produced by other economic units

specialization

Product and resource prices in a market system are determined by ______.

the interaction between buyers and sellers