Chapter 2 Test Review, MGH (MCGraw Hill)

Question 1

Which of the following could raise the cost of production in a command economy?

Accepted Answer

A large and inefficient bureaucracy

Question 2

Which feature of a command economy distinguishes or separates it from a socialist economy?

Accepted Answer

"All" production is managed by the government

Question 3

How are economic transactions shaped in a traditional economy?

Accepted Answer

Elders and ancestors make certain things are done correctly

Question 4

Which nation today is the most striking example of successful privatization?

Accepted Answer

China

Question 5

What explains why mixed economies develop?

Accepted Answer

People become unhappy with aspects of their current economy

Question 6

This Economic philosopher believes economic freedom plays a dual role in a free society.

Accepted Answer

Milton Friedman

Question 7

Which of these statements is descriptive of a market economy?

Accepted Answer

Major decisions are made by individuals, not for them

Question 8

How was an Inuit hunter rewarded for his skill as a hunter?

Accepted Answer

He received the first cuts from a successful hunt

Question 9

Which of these is the most striking example of the costs and risks of pure capitalism?

Accepted Answer

the Great Depression

Question 10

Which of these describes a disadvantage of a traditional economy?

Accepted Answer

New ways of doing things are discouraged

Question 11

Which places the economic systems in order from the least to most flexible?

Accepted Answer

command, socialism, free market

Question 12

Which are disadvantages of communist economies?

Accepted Answer

all of the answers

Question 13

In a transitioning economy, privatization tends to raise the standard of living because

Accepted Answer

people are more productive when it benefits them personally

Question 14

Which statement best describes the communist ideal?

Accepted Answer

Classless society where everyone works for the common good

Question 15

Which type of economy is most prevalent today in the world?

Accepted Answer

Mixed

Question 16

What explains why products made under a command economy are likely to be low in quality ?

Accepted Answer

Workers have little incentive to make them work well

Question 17

Adam Smith's "invisible hand" refers to

Accepted Answer

the ability of free markets to reach desirable outcomes

Question 18

All societies have to embrace or deal with the problem of?

Accepted Answer

scarcity

Question 19

Which system of gov't is most likely to provide goods & services people could not afford

Accepted Answer

a socialist economy

Question 20

Which of these is a major advantage of a market economy?

Accepted Answer

There is a high degree of individual freedom

Question 21

What kind of economy offers uniformity in wages regardless of the occupation or individual?

Accepted Answer

Command and socialist economies

Question 22

Which of the following are disadvantages of common resource?

Accepted Answer

fish in the ocean

Question 23

Which of these countries has an economy most similar to the former Soviet Union?

Accepted Answer

North Korea

Question 24

Which describes a disadvantage of a command economy?

Accepted Answer

Nothing stops gov't from producing things people don't need

Question 25

Which of these economic systems have the least in common?

Accepted Answer

command economy and capitalism

Chapter 2 Test Review, MGH (MCGraw Hill)

Questions 25

Chapter 2 Test Review, MGH (MCGraw Hill)

Questions 25