Topic 2 Review Questions
People in societies with traditional economies tend to rely on established technologies, have access to limited goods, and lack modern conveniences, but they love what they do for work. What part of the preceding statement is an opinion?
"they love what they do for work." is an opinion, not everyone in any economy will they what they do for work all the time.
Describe what a free market economy is.
A market economy with no government regulation.
One of the advantages of a free market is consumer sovereignty. Why do consumers hold such power in the free market system?
Consumers choose what to buy and for what price prompting producers to compete.
What kid of person makes a good entrepreneur?
Determined and innovative.
Use context clues to come up with a definition of the phrase economic equity.
Economic equity is the equality of economic standards throughout society.
Why are mixed economies so prevalent?
Economies flourish with a market system based on consumers and competition with some government involvement to help solve major problems.
Why do you think all communist governments have been authoritarian in nature?
For the government to control the entire economy it must be able to control all of society.
Explain why infrastructure is a public good.
Infrastructure is a good that would be inefficient for consumers to pay individually.
What do you think maybe some of the inherent reasons why the nations today do not have pure free market economies?
Pure free market economies are not always fair and prosperous for all of society.
Provide and example of a public good.
School is a public good payed for by the taxpayers.
How does the tradition of free enterprise impact the availability of consumer products?
Supply and demand of consumers s well as the quality and quantity of goods.
If you pay attention to the news, you probably hear a lot about the national economic data such as unemployment or gross domestic product (GDP). If you have a steady job, why should you care about how the rest of the country is doing?
The economy thriving or failing affects all people in society and their prosperity.
What method do centrally planned economies generally rely upon to control labor?
They control where people people work and how much they are paid.
Using the terms macroeconomic and microeconomic, explain the economic relationship between a nation and the firms and households that are in that nation.
macroeconomics encompasses all of the national economies whereas microeconomics studies firms and business and their effects on the national economy.