Chapter 2- Economics Test Review
A mixed economy of Sweden has
"cradle to grave" social benefits and private ownership of property
In a communist economy, workers are
always employed by the government or government-controlled groups
With voluntary exchange, a buyer and seller agree to do business together
for the mutual benefit of both
In a communist economy, resources are owned by
government
When a nation's economy privatizes it changes from
government ownership to private ownership
The situation where women tend crops and raise children while men hunt is often found in a
traditional economy
Explain the growth of the global economy
transportation is faster, cheaper, and safe computer linkages have made global financial transactions quick, easy, and inexpensive business operations have been enhanced by cross-border business partenerships
A grocery store shows the influence of competition when
two brands of peanut butter with different prices are on the store shelf
Karl Marx predicted that in time
workers would overthrow the industrial system
An advantage of a pure market economy is that it
allows local communities to set their own economic development
Between 1867 and 1894, Karl Marx published a 3-volume study called
Capital
According to Karl Marx, wage slavery was created by the
Industrial Revolution
Write a summary of Karl Marx's economic theories
Marx believed that all of history was based on class differences and the struggle between them. For example, owners of businesses grew richer as the poor stayed poor or became poorer. Marx also believed that the industrial revolution created a system of wage slavery. Marx's last theory explained his beliefs of worker exploitation. Worker exploitation is the idea of keeping wages low to make greater profits. For example, businesses would sell products at a higher price to make greater profits. Worker exploitation became the basis for the industrial system.
The nation where government plays the most limited role in the economy is
The United States
In the former Soviet Union, the practice of people taking factory light bulbs to use in their homes was the result of
a shortage brought on by poor decisions made by central planners
A circular flow model shows how
all interactions occur in a market economy
Absolute loyalty to the people in power is required by a(n)
authoritarian system
Which statement accurately describes both capitalism and communism
both capitalism and communism undertake investments
Suppliers in a product market are
businesses
In a factor market
businesses are customers and individuals are producers
Which statement best contrasts capitalism and communism
businesses own resources; government owns resources
According to Karl Marx, all of history us a struggle between
classes
The influence of the global economy is shown when a shortage of
coffee in Kenya causes coffee prices to rise in the United States
A society that has public schools and ownership of private property has elements of both
command and market economic systems
Bureaucrats deciding what products should be sold in store fronts is a feature of a
command economy
Government officials deciding the distribution of all resources is a feature of a
command economy
A form of authoritarian socialism is
communism
Global financial transactions have been made quick,, inexpensive, and easy by
computer linkages
In a market economy, the real power in the market place is held by the
consumer
A business taking a survey to find out consumer's wants is an illustration of
consumer sovereignty
In economic terms, property means
everything an individual owns and the labor he/she provides
An individual hiring a waitress is participating in the
factor market
With capitalism, which action might reduce unemployment
increase hiring at private firms
The economic decisions of central planners often are wrong because they have little understanding of
local economic conditions
Producers and consumers drive the economy of a
market economic system
Freedom of economic choice is one of the chief advantages of a
market economy
The disastrous famine in North Korea was the result, in great part, of the government's efforts to develop a
market economy
With capitalism, the allocation of good and resources is determined by
market forces
Elements of traditional, command, and market economies are combined in a
mixed economy
Moving steel mills from private ownership to public ownership is an example of
nationalization
In today's world, there are
no pure market economies
Well-defined and actively-enforced private property rights are necessary to the efficient operation of markets work because they prove that a person
owns what he or she is selling
When a nation's economy nationalizes it changes from
private ownership to public ownership
With capitalism, investment is driven by
private parties seeking profits
Moving railroads from government ownership to ownership by stockholders is an example of
privatization
An individual buying a DVD is participating in the
product market
With capitalism, which of the following do market forces reward
productivity and private ownership of resources
Since 2003, central planners of North Korea have
relaxed restrictions on private ownership somewhat
Which of the following statements about communism is accurate
resources are owned by the government
The government owns some, or all, factors of production in a(n)
socialist system
An example of intellectual property is a(n)
song
In economic terms, laissez faire means that the government
stays out of the market place
The way society uses scarce resources to satisfy its people's unlimited wants is called an economic
system
With capitalism, income distribution is determined by market forces
that reward productivity
A society in which some people practice subsistence farming while others own businesses has elements of both
traditional and socialist economic systems
In the United States, harvest-time customs represent the influence of a
traditional economy
Resistance to the introduction of new farming methods is an attitude often found in a
traditional economy
