Which of the following is NOT a key economic question?

How should it be ensured that goods and services are paid for?

The economy of China is in transition. What does this mean?

The economy is moving from central planning toward a market-based system.

Which of the following is NOT characteristic of a centrally planned economy?

Each collective or factory sets its own goals.

What is an important advantage of a free market?

It offers a wide variety of goods and services.

How could the Chinese economy be characterized?

mixed, but on the side of centrally planned

What is the purpose of competition?

to act as a regulating force in the marketplace

A person who believed in the doctrine of laissez faire would disapprove of

government funding of education.

Which of the following is characteristic of a traditional economy?

Children tend to have the same jobs as their parents did.

What is the function of an economic system?

to produce and distribute goods and services

Why does even a free market economy need some government intervention?

to provide for things that the marketplace does not address

What is the product market?

market which households purchase the goods and services that firms produce

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Chapter 2 - Economic Systems

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This covers material related to Economic Systems, the 5 economic goals and how the essential economic questions are answered.

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Questions 28

Answers

1
Which of the following is NOT a key economic question?
Who consumes these goods and services?
How should it be ensured that goods and services are paid for?
How should these goods and services be produced?
What goods and services should be produced?
2
What is the motivating force behind the free market?
competition
specialization
the invisible hand
self-interest
3
What incentive motivates a manufacturer to sell a product?
popularity of the product
putting others out of business
pleasing the consumer
making profits on sales
4
The economy of China is in transition. What does this mean?
Individual firms are in the process of being sold to the state.
rarely interferes in the free market and is receptive to foreign investment
Investments are determined by state control instead of by private decision.
The economy is moving from central planning toward a market-based system.
5
a philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society
socialism
factor payments
economic system
standard of living
6
What is one of the most important advantages of a free market?
It protects the less fortunate.
It can change rapidly.
It is easy to regulate.
It encourages growth.
7
Which of the following is NOT characteristic of a centrally planned economy?
The central government makes all economic decisions.
Each person is assigned a job.
Each collective or factory sets its own goals.
The central government owns all land and capital.
8
What is an important advantage of a free market?
It does not change unless the government directs it.
It offers a wide variety of goods and services.
It is easy to regulate.
It protects the less fortunate.
9
one’s own personal gain
factor payments
safety net
self-interest
laissez faire
10
How could the Chinese economy be characterized?
free market
mixed, but on the side of free market
centrally planned
mixed, but on the side of centrally planned
11
What is the purpose of competition?
to cause buyers to have to be careful about spending their money
to act as a motivating force behind the free market
to cause producers to attempt to put each other out of business
to act as a regulating force in the marketplace
12
Which of the following does a government provide as part of a safety net for the people?
a strong military defense
unemployment compensation
regulation of commerce
general elections every four years
13
the method used by society to produce and distribute goods and services
safety net
privatize
free market
economic system
14
level of economic prosperity
economic system
standard of living
traditional economy
safety net
15
A person who believed in the doctrine of laissez faire would disapprove of
government funding of education.
consumer sovereignty.
self-interest as the motivating force in the free market.
the invisible hand of the marketplace.
16
an economic system that permits the conduct of business with minimal government intervention
traditional economy
economic system
free market
socialism
17
In which kind of economy would you have the most opportunity to try to achieve success?
command economy
economy of scale
traditional economy
market economy
18
What incentive do manufacturers have to sell their products?
popularity of the product
pleasing the consumer
putting others out of business
making profits on sales
19
government programs that protect people experiencing unfavorable economic conditions
standard of living
safety net
factor payments
socialism
20
Which of the following is characteristic of a traditional economy?
Communities tend to be fast-growing.
They are usually based on light industrial production.
Children tend to have the same jobs as their parents did.
They have a high standard of living.
21
to sell a state-run firm to individuals
privatize
laissez faire
self-interest
traditional economy
22
What is the struggle among various producers for the consumer’s business called?
Socialism
Self-Regulation
Competition
Incentive
23
What is the function of an economic system?
to give all producers the same access to consumers
to produce and distribute goods and services
to make sure all people have equal access to goods
to make sure people are paid for their labor
24
In what kind of an economy does the government make all the decisions?
centrally planned
Laissez-Faire
free enterprise
Socialst
25
What does the process of specialization do for an economy?
It makes it easier to control.
It eliminates unemployment.
It fosters competition.
It makes it more efficient.
26
Why does even a free market economy need some government intervention?
to provide for things that the marketplace does not address
so that the government has some control over factor resources
to make sure the government can fulfill its needs for military personnel
to ensure that the government has the freedom to tax as necessary
27
What is the product market?
market which households purchase the goods and services that firms produce
market in which income is received for supplying land, labor, or capital
market in which payments are received for selling products to consumers
market in which firms purchase the factors of production from households
28
economic system that relies on habit, custom, or ritual to decide questions of production of goods and services
traditional economy
laissez faire
safety net
privatize

Chapter 2 - Economic Systems Flashcards | StudBud