Which is generally a characteristic of a command economy?

government agencies are involved in production

The combination of limited resources and unlimited wants

Why would the US increase tariffs on China?

To encourage domestic production

Which example demonstrates a government subsidy?

cash grant given to businesses to install solar panels

What is a disadvantage of specialization?

Workers skills may be limited to one task or skill set

How did incentives motivate ship Captains who transported prisoners?

They were only paid if prisoners arrived alive

According to supporters of a market economy, what is the only role of the government in the economy?

protect private property rights

What are the 4 factors of production?

labor, land, entrepreneurship, capital

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Unit 1: Basics of Economics

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Questions 21

Answers

1
Which is generally a characteristic of a command economy?
investment is encouraged by the promise of large profits
entrepreneurs sell shares in profits with the government
the role of government in the economy is restricted by law
government agencies are involved in production
2
What is Scarcity?
The combination of too many needs and too few wants
The combination of limited wants and unlimited resources
The combination of limited resources and unlimited wants
The problem of having more needs than wants
3
Which country has an absolute advantage?
Country B
Country C
Country A
there is no absolute advantage
4
Which of the following is a factor that drives globalization?
economic interdependence
specialization
scarcity
all of the above
5
The most important consideration in determining whether or not two countries will trade with each other is:
comparative advantage
absolute advantage
ability to produce
natural resources
6
What do points outside (to the right) of a PPF represent?
efficent use of resources
inefficent use of resources
production isn't possible
the natural resources available for production
7
Under policy of Laissez-Faire, the economy should be guided by:
invisible hand
experts in industry
the government
tradition and custom
8
Why would the US increase tariffs on China?
To encourage trade with European nations
To encourage domestic production
To encourage trade with China
To slow down domestic production
9
What is a potential disadvantage in a mixed economy?
no encouragement of innovation
limited consumer products
potentially high taxes
government protection of consumers
10
An economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners.
absolute advantage
comparative advantage
cost benefit anaylsis
Production Possibility Frontier
11
Which of the following would be an example of capital?
machines on an assembly line
Oil used in the production process
workers in a factory
manager of a factory
12
The value or potential benefit of the of what we give up when we choose an alternative, is known as:
trade off
allocation of resources
opportunity cost
cost benefit analysis
13
Which of the following is NOT benefit for consumers in a market economy?
volunary exchange of goods and services
Competition
Government subsides
innovation leads to quality products
14
Which example demonstrates a government subsidy?
fines given to businesses who violate enviromential law
cash grant given to businesses to install solar panels
a tax incentive given to purchase electric cars
a loan given to businesses to be more energy efficient
15
What is the largest incentive for starting a business in a market economy?
consumer soverignty
competition
profit motive
economic independence
16
Which of the following is an incentive for consumers?
higher wages
rewards programs
benefits packages
profit motive
17
What is a disadvantage of specialization?
Workers skills may be limited to one task or skill set
Workers are inefficient
Workers must be paid more when they have specialized skills
Workers are highly motivated to produce more goods
18
How did incentives motivate ship Captains who transported prisoners?
They were paid if prisoners arrived dead or alive
They were paid a flat rate for their efforts.
They were paid based on the distance of the journey
They were only paid if prisoners arrived alive
19
According to supporters of a market economy, what is the only role of the government in the economy?
protect private property rights
To protect workers from low wages
Protect consumers from high prices
protect enviromentialist from climate change
20
Which is NOT a question all economies must answer?
What to produce?
Where to produce?
For whom to produce?
How to produce?
21
What are the 4 factors of production?
labor, land, entrepreneurship, capital
capital, labor, law, land
capital, land, resources, labor
labor, law, inflation, entrepreneurship

Unit 1: Basics of Economics Flashcards | StudBud