2.05 Unit 3 Exam

Which of the following statements describes the economic goal of efficiency?

A country understands how to best utilize its resources to reach maximum output.

Which of the following actions are likely to be motivated by scarcity and monetary incentives:

After a few years as a high school social studies teacher, Melissa resigns from her position with the intention of enrolling in law school.

Adam Smith's concept of the "invisible hand" plays an important role in centrally planned economies.

False

Most economies in the world today are purely free market economies.

False

This is NOT one of the important questions when countries decide how to allocate income: "Who will consume what is produced?"

False

Consider the following situation: A dairy farmer in Pennsylvania has recently discovered that his property is situated above a small deposit of natural gas that can be reached through a relatively controversial technique known as hydraulic fracturing. Although the state is experiencing a boom in fossil fuel production, which would allow him to receive an instant financial benefit, he worries about any long-term impact that harvesting the gas will have on his dairy stock, his family, and the environment of his property. Which of the following actions could he take to ensure the most benefit from his nonrenewable resources, while protecting his renewable ones?

Hire a consultation firm to conduct both a geological and ecological resource management survey of his farm to provide an estimate of the likely negative impact that gas production will have on his property.

Which of the following is best described by this statement: "While the public technically owns the factors of production, it is the government that oversees (through planners) the allocation of resources and makes economic decisions"

Socialism

Which of the following is NOT considered a market?

Standing in an unemployment line.

Which of the following statements describes the economic goal of security?

The government provides an unemployment insurance program.

Economic systems must answer the three economic questions because resources are scarce.

True

In centrally planned economies. the government owns most of the factors of production.

True

Markets are necessary because no one is able to provide all of their needs.

True

The term "laissez faire" means that the government is not involved or is involved on a very limited basis in the economy.

True

Which of the following is NOT one of the three key economic questions?

Who will produce it?

Which of the following ensures that consumers will be able to purchase products at the lowest possible price?

competition