What is the function of an economic system?

to produce and distribute goods and services

what is the product market?

market where households purchases goods and services

What best describes the role of government in a free enterprise system?

Allow individuals to run their businesses the way they want

Which of the following is NOT characteristic of a command economy?

Each collective or factory sets its own goals.

Which of the following is NOT a key economic question?

How should goods and services be paid for?

Which of the following is a benefit of a free market system?

Create a variety of new and cheaper products.

What is NOT a benefit of a free market economy?

growing gap between rich and poor

Each society determines who will consume what is produced based on

its unique combination of social values and goals.

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Economic Systems Review

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Questions 20

Answers

1
What is the function of an economic system?
to make sure people are paid for their labor
to make sure all people have equal access to goods
to produce and distribute goods and services
to give all producers the same access to consumers
2
The doctrine that government generally should not intervene in the marketplace
self-interest
"invisible hand"
laissez faire
safety net
3
what is the product market?
market where firms purchase factors from households
market where households purchases goods and services
market where income is received from factors of production
4
Who owns the factors of production in a free market?
firms
government
the market
households
5
What is the struggle among various producers for the consumer's business called?
competition
socialism
self-regulation
incentive
6
An expectation that encourages people to behave in a certain way.
household
incentive
self interest
laissez faire
7
The income people receive for supplying such things as land, labor, or capital.
incentive
product market
safety net
factor payment
8
A situation in which households purchase the goods and services that firms produce.
product market
factor payment
economic system
factor market
9
What best describes the role of government in a free enterprise system?
Require companies to disclose information to consumers
Control business activities.
Decide what companies to form & allow managers to run them
Allow individuals to run their businesses the way they want
10
_{Which of the following is NOT characteristic of a command economy?}
Each person is assigned a job.
The central government makes all economic decisions.
The central government owns all land and capital.
Each collective or factory sets its own goals.
11
Which of the following is NOT a key economic question?
What should be produced?
Who consumes these goods and services?
How should goods and services be paid for?
How should goods and services be produced?
12
Which of these is something that you would NOT expect the safety net of government to provide?
joblessness
injuries
natural disasters
early retirement
13
Which of the following is a benefit of a free market system?
Cause producers to try to put each other out of business.
Make sure everyone gets an equal share of resources.
Follow the traditional methods of production.
Create a variety of new and cheaper products.
14
Competition and self interest are two important forces in
communist economies.
traditional economies.
command economies.
free market economies.
15
What is NOT a benefit of a free market economy?
creation of wealth
economic freedom
a variety of goods
growing gap between rich and poor
16
To improve its standard of living, a nation's economy must
grow through innovation.
reach economic equity.
remain stable.
allow the central government to make all the decisions.
17
One's own personal gain is
laissez faire
self-interest
"invisible hand"
incentive
18
Each society determines who will consume what is produced based on
what government decides.
economic equity.
its unique combination of social values and goals.
the amount of factor payments.
19
Term economists use to describe the self-regulating nature of the marketplace
incentive
"invisible hand"
self-interest
laissez faire
20
Why do people need to buy and sell products or services?
No one is self-sufficient.
We need to maintain a competitive society.
People need to provide the market with goods and services.
People need to buy and sell products to make a profit.

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