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Econ Chapter 2 (2023) Flashcards | StudBud
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Econ Chapter 2 (2023)
Econ Chapter 2 (2023)
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Economic Systems & Tools Chapter
Flashcards
25 cards
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Practice quiz
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Questions
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Answers
1
Economies that are shifting their orientations from central planning to competitive markets are known as
transient economies
traditional economies
transitional economies
transactional economies
2
Specialization occurs when individual workers focus on
following management's directions.
single tasks.
cooperating with other workers.
earning as much profit as possible.
3
A steel factory pollutes the water, but the price of steel fails to relfect such costs, because pollution costs are
rules of the game.
externalities.
public costs.
opportunity costs.
4
Being able to make something using fewer resources than others require would give you a(n)
comparative advantage.
absolute advantage.
camparative disadvantage.
monopoly.
5
Most economies today are
pure command economies.
traditional economies.
pure market economies.
mixed economies.
6
According to Adam Smith, market forces coordinate production as if by
a court ruling.
government degree.
majority rule.
an invisible hand.
7
Which of the following is
NOT
true of a pure market economy?
Resource owners have property rights.
Markets are regulated by government.
Prices guide resources to the most productive use.
Markets answer the what, how, and for whom questions.
8
Consumers in command economies have an unlimited amount of all good available to them.
True
False
9
An economic system resolves the questions of what, how and for whom that all economies must answer.
True
False
10
Which of the following is a problem with pure command economies?
environmental damage.
inability to provide for national defense.
excess consumer goods.
difficulty enforcing property rights.
11
Points along a PPF represent production of 2 types of products that
make efficient use of resources.
are most satisfying to consumers.
are most profitable for business owners.
are best for the economy.
12
Which type of economy produces the highest standard of living for its citizens.
market-oriented
transitional
command
traditional
13
The downward slope of PPF indicates the economy produces 1 more good, it produces less of others. What is demonstrated?
increased efficiency
opportunity cost
increased production
competition
14
An Economic system in which all resources are government owned & production is directed by government is known as
Pure Command Economy
Mixed Economy
Pure Market Economy
Monopoly economy
15
In a pure command economy, all the following except
living space is rationed.
prices are set.
competition is encouraged.
resources are controlled.
16
An economic system is the set of mechanisms & institutions that resolve the questions of what, how, and
when.
for whom.
where.
why.
17
Which factor might best help an economy to grow?
lowering educational standards
labor force increases
less immigration
cleaner air
18
The law of competitive advantages helps explain
opportunity costs.
how economists work.
why some products do better than others.
why a person talented in many things can get more done by specializing.
19
The United States is a mixed economy, but markets play a relatively large role.
True
False
20
A traditional economy is shaped largely by custom or religion
False
True
21
The main medium of exchange in the United States is
stock.
money.
barter.
bonds.
22
In a market economy, what rights give resource owners the freedom to use their resources as they please?
Economic rights
Property rights
Monopoly rights
Voting rights
23
In a pure market economy, market forces coordinate as if by an "invisible hand."
False
True
24
An example of a public good, in an economic context, is
national defense spending.
lower new car prices.
cheaper gas prices.
longer library hours.
25
The economy of the United States can be described as a
Traditional economy
Pure market economy
Mixed economy
Command economy
