Econ 201 ch. 2 quiz
What are copyrights designed to accomplish?
Protect intellectual property rights
In his 1776 book, "an inquiry into the nature and causes of the wealth of nations," Adam Smith notes that specialization increases productivity. Which of the following was the cause of this phenomenon?
The division of labor
Which of the following is critical to the success of the market system
To allow individuals or firms to have exclusive use of their property
Ms. Boulware is the best lawyer and the best secretary in town. She has:
an absolute advantage in both jobs
In the United States, property rights:
are guaranteed by two amendments to the U.S. Constitution
In what type of economy does the government decide how most economic resources will be allocated?
centrally planned economy
In the circular flow model of the economy, ___ are the suppliers of goods and services.
firms
If a country has a comparative advantage in the production of a good, then that country:
has a lower opportunity cost in the production of that good
Contracts, insurance, patents and accounting rules are:
inventions that make a market work better
Adam Smith observed that people pursuing their own self-interest in a free market will actually result in the best interest of society as if these actions were guided by a(n):
invisible hand
What is the name given to the highest-valued alternative that must be given up to engage in any activity
opportunity cost
When nations specialize in their comparative advantage and engage in trade:
overall standards of living increase
absolute advantage is the ability of an individual, firm, or country to:
produce more of a good or service than competitors using the same amount of resources
In a circular flow model, which of the following refers to markets where goods such as computers or services such as medical treatment are offered
product markets
Role of the Entrepreneur always involves
taking risks
According to the theory of comparative advantage, specialization and free trade will benefit:
All trading parties who specialize in the production of good in which they have competitive advantage