Chapter 2

economic system in which the government owns all the factors of production and there is little or no political freedom.

Communism

Which of the following is part of communism but not socialism? a. central planning b. government controlled services c. government controlled resources d. authoritarian government

authoritarian government

economic system in which the government makes all economic decisions.

command economy

What "invisible hand" regulates the free market economy? a. specialization b. competition and self-interest c. competition between firms d. incentive and efficiency

competition and self-interest

Which of the following philosophers argued that a free market would regulate itself with little government involvement? a. Karl Marx b. Vladimir Lenin c. Friedrich Engels d. Adam Smith

Adam Smith

economics system in which the government owns some or all of the factors of production.

Socialism

How is the economic system in China today different from the one in Soviet Russia? a. The Chinese government is socialist, rather than communist. b. The Chinese government owns firms in major industries. c. The Chinese government is not authoritarian. d. The Chinese government allows far more economic freedom.

The Chinese government allows far more economic freedom.

Which of the following is a summary of the three key economic questions? a. How, when, and from whom should consumers get what they want? b. When, where, and by whom should goods and services be produced? c. What goods and services should be produced, how, and for whom? d. Who will buy which goods and services, and how much will they pay?

What goods and services should be produced, how, and for whom?

The United States economy is a mixed economy a. based on a traditional economy, but allowing some government intervention. b. based on a free market, but allowing some government intervention. c. based on a free market, allowing no government intervention. d. based on a centrally planned economy, but limiting government intervention.

based on a free market, but allowing some government intervention.

economic system in which decisions are based on individual choice and voluntary exchange direct economic decisions.

market economy

Increasing the number of laborers or an improvement in technology will shift the PPC a. to the left b. it won't shift c. none of the above d. to the right

to the right

economic system in which people produce and distribute goods according to customs handed down from generation to generation.

traditional economy

A production possibilities curve shows the relationship between the production of a. two types of farm goods. Selected:b. any two categories of goods.This answer is correct. c. farm goods and factory goods. d. two types of factory goods.

two types of factory goods.