economics
''Every individual necessarily labors to render the annual revenue of the society as great as he can. . . . He intends his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."—Adam Smith, The Wealth of Nations Which of the following BEST paraphrases this quotation? A. Competition is the invisible hand that motivates individuals to sell their labor. B. By pursuing their own self-interest, individuals help the economy grow. C. Through specialization, individuals succeed in increasing their annual revenue. D. The invisible hand is a basic characteristic of the free enterprise system.
b
OSHA is the U.S. government agency promoting safety in the workplace. This sign BEST represents government's attempts to A. eliminate deceptive advertising. B. promote the general welfare. C. maintain order and security. D. provide information to consumers.
b
Which basic characteristic of free enterprise does this picture BEST illustrate? A. the profit motive B. the right of free contract C. the invisible hand D.the benefits of competition
a
"Competition encourages entrepreneurs to find new ways of producing goods and services." This statement MOST CLOSELY relates to which of the advantages shown in the concept web? A. growth and innovation B. variety of goods and services C. freedom of choice for consumers and producers D.efficient response to changing marketplace conditions
a
Which of the following BEST summarizes the trend shown in this table? A. China's shift toward a market economy has helped its economy thrive. B. China's shift toward a command economy has helped its economy thrive. C. China's shift toward a market economy has had negative economic results. D. China's shift toward a command economy has had negative economic results.
a
Which role of government in the U.S. free enterprise system does this picture illustrate? (reading car sticker) A. to ensure that producers provide consumers with basic information about goods and services B. to ensure that producers provide competitors with basic information about goods and services C. to ensure that consumers pay only those costs that the government has agreed to D. to ensure that consumers are taxed on all transactions in the marketplace
a
Who benefits from the free market economy? a. consumers and producers b. people living in poverty c. wealthy entrepreneurs d. the federal government
a
One way government affects the physical flow in a mixed economy is by A. making expenditures to support households. B. purchasing goods and services from firms. C. taxing households to support firms. D. taxing firms to support households.
b
What customary role does the United States government play related to refineries like this one? A. It takes control of refineries that do not make a profit. B. It regulates refineries' release of pollutants into the atmosphere. C. It tells refinery owners what they are allowed to produce. D. It tells refinery owners how much they are allowed to produce.
b
What is one key role of the consumer in the free enterprise system? A. to persuade public officials to pass health and safety laws B.to signal producers concerning what and how much to produce C. to respond to the incentives of competition and profit D. to determine who consumes the goods and services that are produced
b
Which basic economic question deals with the issue of where a person can afford to live? (nice house) a. How should goods and services be produced? b. Who consumes the goods and services that are produced? c. Why should goods and services be produced? d.What goods and services should be produced?
b
Based on this Venn diagram, which economic goal do communist and socialist systems both try to achieve? A.economic efficiency B. economic freedom C. economic equity D. economic profit
c
In a society with a command economy, who answers the basic economic questions? A. consumers in markets B. producers in markets C. a central government D. a military commission
c
One way the government helps increase economic productivity is by A. increasing taxes. B. imposing regulations. C. encouraging innovation. D.favoring quantity over quality.
c
Read each question and choose the best answer.The benefits of the U.S. free enterprise system include the individual freedom of consumers and producers. What aspect of Americans' economic freedom does this photo BEST illustrate A. the right to compete in the marketplace B. the right to become an entrepreneur C. the right to buy or sell property D. the right to sign a contract
c
The Altone Trumpet Company opened its new manufacturing plant on Gillespie Road on March 3. They hired 65 local workers, which has helped lower the town's unemployment rate. Here it is, three weeks later, and already four local people have applied for licenses to open new businesses near the plant, including a sandwich shop and café. Which of the following best describes the town's lower unemployment rate and the applications for new businesses? A. the efficient allocation of resources B. the free-rider problem C. positive externalities D. negative externalities
c
Which of the following is a function of firms in the market economy? (picture) A. They ensure that the monetary flow is greater than the physical flow. B. They supply households with land, labor, and capital. C. They convert land, labor, and capital into goods and services. D. They consume the goods and services that households produce.
c
Government regulations impose an enormous burden on large and small businesses in America, discourage productivity, and contribute substantially to our current economic woes."—President Ronald Reagan, January 22, 1981 President Reagan would MOST LIKELY agree that government regulations A. limit the cost of goods. B. encourage competition. C. boost economic growth. D. cut into companies' profis.
d
How does this photo support the idea that national defense must be a public good in the United States? A. Private enterprise does not have the resources to build as many airplanes as the U.S. Air Force needs. B. There is no profit incentive for a private company to provide equipment to the U.S. Defense Department. C. The huge loss of airplanes and other equipment during wartime is an example of market failure. D. It is impractical to exclude nonpayers from enjoying the benefit of Air Force patrols and other aspects of national defense.
d
The federal government can pursue economic policies such as spending or taxation to stimulate an economy that is contracting or to cool one that is expanding too rapidly. When the government acts to influence the economy in these ways, what is its goal? A. to maintain consumers' freedom of choice B. to support self-regulation in the marketplace C. to encourage economic citizenship D. to promote stability in the business cycle
d
This photograph represents the type and scale of economic activity that is typical of a (man with doggy in snow) A. centrally planned economy. B. free market economy. C. specialized economy. D. traditional economy.
d
What does this graphic suggest about economic equity in American society since 1976? A. Equity was achieved in the early 2000s. B. Equity has remained stable over time. C. Equity has steadily increased over time. D. Equity has steadily decreased over time.
d
What is one of the major disadvantages of a centrally planned economy? A. It lacks the capacity to produce factory goods because its resources are scarce. B. It places individual freedoms above the pursuit of societal goals. C. It focuses on rewarding innovation instead of guaranteeing jobs and income. D. It does not allow producers of goods and services to respond to consumer signals.
d
What is one way in which the economy of Singapore varies from the economy of Iran? A. Singapore's economy relies on central planning to a greater extent than Iran's. B. Iran's economy relies on free market principles to a greater extent than Singapore's. C. Iran's government is less involved in the nation's economy than Singapore's government is. D. Singapore's government is less involved in the nation's economy than Iran's government is.
d