Ch 2 - Economic Systems and Decision Making

Question 1

Which of the following could raise the cost of production in a command economy?

Accepted Answer

a large and inefficient bureaucracy

Question 2

system in which economic activity is the result of ritual, habit, or custom

Accepted Answer

traditional economy

Question 3

economic shift from private ownership to government ownership

Accepted Answer

nationalization

Question 4

system in which economic activity is driven by supply, demand, and the price system

Accepted Answer

market economy

Question 5

Which of the following is a feature of Japanese capitalism that would be illegal in the US?

Accepted Answer

keiretsu

Question 6

efficient way of allocating resources & producing/distributing goods/services in a society

Accepted Answer

economic system

Question 7

Which explains why products made under a command economy are more likely to be low quality?

Accepted Answer

The workers have little incentive to make them well

Question 8

Which of the following lists economic systems in order from least to most flexible?

Accepted Answer

command, socialism, free market

Question 9

How are economic transactions shaped in a traditional economy?

Accepted Answer

Elders make certain that things are done in specific ways.

Question 10

Which nation today is the most striking example of successful privatization?

Accepted Answer

China

Question 11

Represents a place where the shift to capitalism is nearly complete but farfrom fullyeffective?

Accepted Answer

Eastern Europe

Question 12

economic sector in which goods and services are sold illegally

Accepted Answer

black market

Question 13

economic strategy for achieving rapid industrialization, used by the USSR&China

Accepted Answer

Five-Year Plan

Question 14

Which of the following is the best description of the economic system in Cuba?

Accepted Answer

It is a command economy with a strong central authority.

Question 15

Chinese strategy used to quickly revolutionize industrial agriculture and production

Accepted Answer

Great Leap forward

Question 16

Which of these is a major advantage of a market economy?

Accepted Answer

There is a high degree of individual freedom.

Question 17

economic system in which a central authority makes the major economic decisions

Accepted Answer

command economy

Question 18

economic system in which private citizens own and use resources to make a profit

Accepted Answer

capitalism

Question 19

conversion of state-owned property to individual ownership

Accepted Answer

privatization

Question 20

Which type of economy is most prevalent in the world today?

Accepted Answer

mixed

Questions 20