What is one of the major disadvantages of a centrally planned economy?

It doesnt allow producer of good and service to respond to consumer signals

How do self-interest and competition affect free markets?

They work together to regulate supply, demand, and prices.

Which of the following represents a difference between socialism and communism?

Socialism may allow some free market practices; communism does not.

Which basic economic question deals with the issue of where a person can afford to live?

Who consumes the goods and services that are produced?

Key advantages of free market economic systems include

economic efficiency, economic freedom, economic growth, variety of goods.

Which of the following describes the benefits of specialization in a free market?

Specialization leads to efficient use of capital, land, and labor.

The distribution of income received in the form of rent, wages, or interest is the main factor that determines

who consumes goods and services.

Government involvement in a modern economy is generally defended because

government is more able than firms to meet some needs and wants of society

Which of the following is an explanation of what Adam Smith called the "invisible hand" of the marketplace?

Self-interest, competition and incentives promote smoothly running markets.

What distinguishes an authoritarian government from a democratic one?

It requires strict obedience from its citizens.

How does innovation promote economic growth?

by introducing new goods and services that create new markets

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ECON 2.1-2.4 Quiz Review

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Questions 20

Answers

1
What is one of the major disadvantages of a centrally planned economy?
Itplaces individual freedoms above the pursuit of societal goals
Itfocuses on rewarding innovation instead of guaranteeing jobs and income
It lacks the capacity to produce factory goods because resources are scarce
It doesnt allow producer of good and service to respond to consumer signals
2
How do self-interest and competition affect free markets?
They help level playing field between efficient and inefficient producers.
They represent the opposing interests of consumers and producers.
They work together to regulate supply, demand, and prices.
They work together to keep prices high.
3
Which of the following is typical of a centrally planned economy?
government control
competition among producers
private property
consumer sovereignty
4
A government hiring freeze would directly impact what aspect of the circular flow model of a mixed economy?
product market
factor market
transfer payments
businesses
5
Which of the following represents a difference between socialism and communism?
Socialism requires central control of all resources; communism does not.
Socialism emphasizes the equal distribution of wealth; communism does not.
Socialism depends on authoritarian government; communism does not.
Socialism may allow some free market practices; communism does not.
6
Which basic economic question deals with the issue of where a person can afford to live?
Why should goods and services be produced?
Whatgoods and services should be produced?
How should goods and services be produced?
Who consumes the goods and services that are produced?
7
Which basic economic goal is most easily achieved in a traditional economy?
efficiency
innovation
equity
growth
8
Key advantages of free market economic systems include
rising prices, specialization, negative incentives, and multiple markets.
economic efficiency, economic freedom, economic growth, variety of goods.
online markets, producer sovereignty, self-interested consumers, low prices
positive incentives, negative incentives, specialized consumers.
9
What is the best car ever mass produced?
Oubaru Sutback
Subaru Outback
10
What is a disadvantage of central planning?
overreliance on profit incentive
no emphasis on economic equity
too much individual freedom
lack of economic efficiency
11
Which of the following describes the benefits of specialization in a free market?
Specialization leads to efficient use of capital, land, and labor.
Specialization leads to lower overall output.
Specialization leads to decreased competition among producers.
Specialization leads to higher prices.
12
An economy that maximizes its resources and can deliver the right goods in the right quantity has achieved which goal?
equity
security
freedom
efficiency
13
The distribution of income received in the form of rent, wages, or interest is the main factor that determines
who consumes goods and services.
where goods and services are consumed.
how goods and services are produced.
who produces goods and services.
14
Government involvement in a modern economy is generally defended because
free market principles do not encourage economic growth
government is more able than firms to meet some needs and wants of society
the marketplace always meets the needs and wants of society's members.
the marketplace has many incentives to create public works such as parks.
15
Which of the following is an explanation of what Adam Smith called the "invisible hand" of the marketplace?
Advertising causes consumers to want stuff that they otherwise don't want.
Self-interest, competition and incentives promote smoothly running markets.
Unforeseen events disturb supplies of goods and services and affect prices
Governments influence the decisions of consumers and producers in market.
16
What distinguishes an authoritarian government from a democratic one?
It requires strict obedience from its citizens.
It discourages a strong central government.
It pursues capitalist economic policies.
It respects individual rights.
17
Which of these is an example of restrictions that government places on the use of business property?
corporate income taxes
providing for security
zoning laws
regulation of competition
18
Private property ownership and some government regulation of the economy are characteristics of which economic system?
traditional economy
free enterprise system
mixed economy
command economy
19
How does innovation promote economic growth?
by introducing new goods and services that create new markets
by ensuring people's freedom to make their own choices
by reinforcing traditional values in a society
by rewarding the development of efficient technology
20
In a society with a command economy, who answers the basic economic questions?
consumersin markets
producersin markets
acentral government
amilitary commission

ECON 2.1-2.4 Quiz Review Flashcards | StudBud