Economics- Chapter 2 Test Review

An example of a public good, in an economic context, is

In a pure market economy, market forces coordinate production as if by an "invisible hand."

A system of exchange in which products are traded directly for other products is

_ serves as a medium of exchange b/c it is the one thing everyone is willing to accept for G&S

In a pure market economy, firms do not produce public goods because

A traditional economy is shaped largely by custom or religion.

Which type of economy produces the highest standard of living for its citizens?

An economic system resolves the what, how and for whom questions all economies must answer.

Consumers in command economies have an unlimited amount of all goods available to them.

Water pollution from a factory is an example of a(n)

Most economies today are

Which factor might best help an economy grow?

Which of the following is NOT true of a pure market economy?

According to Adam Smith, the invisible hand of __ promotes the general welfare of the people.

A command economy is sometimes called ___

Any movement along the PPF involves producing less of one good to produce more of another.

The main medium of exchange in the United States is

Converting government enterprises into private enterprises is a process called

The United States is a mixed economy, but markets play a relatively large role.

Transitional economies are in the process of

__ occurs when ind. workers focus on single tasks, enabling each to be efficient & productive

According to law of comparative adv., the worker with lower _ should specialize in that output.

The law of comparative advantage helps explain

An econ. system where all resources are gov't-owned & production is directed by central gov't

An outward shift of the PPF reflects an economic downturn.

Being able to make something using fewer resources than other producers require gives you a(n)

In a market economy, what rights give resource owners the freedom to use resources as they wish

The _ organizes the production process so each worker specializes in separate tasks. 

The economy of the United States can be described as a

Which of the following is a problem with pure command economies?