Distribution of income received in the form of rent or wages is the main factor that determines

who consumes goods and services.

What is one key role of the consumer in the free enterprise system?

signal producers concerning what and how much to produce

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

Does not allow producers of g& s to respond consumer signals

Market failure occurs whenever

free markets fail to distribute resources efficiently.

Which of the following explains why city fireworks on the Fourth of July is a public good

Nonpayers cannot be prevented from seeing the fireworks

How does innovation promote economic growth?

introducing new goods and services that create new markets

In what way does the government behave like a household in a mixed economy?

It purchases goods and services from firms.

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

who consumes the goods and services?

How do socialism and communism differ when it comes to government systems?

Socialism can be democratic, communism is authoritarian.

What might be the benefit of the gov providing a public good rather than the private sector?

greater efficiency in providing the good

A student volunteers at a food pantry on Fridays , which might be a negative externality?

The student's parents have to drive him or her

What are the three basic economic questions all societies must answer?

what g&s get produced, how they are produced, who consumes

A house is at the center of an eminent domain dispute, this person is most likely protesting

attempt by the gov. to take property for the public

How is gross domestic product used to monitor the business cycle?

GDP shows if the nation's economy is expandingorcontracting.

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Economic Systems

18 termsStudBud Administration147 plays

Unit # 3

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Questions 18

Answers

1
Distribution of income received in the form of rent or wages is the main factor that determines
who produces goods and services.
who consumes goods and services.
how goods and services are produced
where goods and services are consumed.
2
In a society with a command economy, who answers the basic economic questions?
producers in markets
a central government
consumers in markets
a military commission
3
What is one key role of the consumer in the free enterprise system?
determine who consumes the good & services that are produced
signal producers concerning what and how much to produce
to respond to the incentives of competition and profit
persuade public officials to pass health and safety laws
4
What is one of the major disadvantages of a centrally planned economy?
Focuses on rewarding innovation instead of jobs and income
Places individual freedoms above societal goals
Lacks the capacity to produce goods b/c resources are scarce
Does not allow producers of g& s to respond consumer signals
5
Market failure occurs whenever
goods fail to arrive at a market in a timely fashion
voluntary exchange in a market fails to result in a sale
free markets fail to distribute resources efficiently.
government builds infrastructure
6
one way the gov. helps increase economic productivity is by
favoring quantity over quality
encouraging innovation
increasing taxes
imposing regulations
7
Which of the following explains why city fireworks on the Fourth of July is a public good
Fireworks are a scarce resource
Each consumer pays a fee to see the fireworks.
Nonpayers cannot be prevented from seeing the fireworks
Fireworks displays usually take place in a public area.
8
How does innovation promote economic growth?
introducing new goods and services that create new markets
by reinforcing traditional values in a society
by rewarding the development of efficient technology
by ensuring people's freedom to make their own choices
9
In what way does the government behave like a household in a mixed economy?
It purchases goods and services from firms.
It sells land, labor, and capital to firms.
It transfers money to both households and firms.
It pays taxes to firms.
10
Who benefits from the free market economy?
Consumers and Producers
wealthy entrepreneurs
the federal government
people living in poverty
11
Which basic economic question deals with the issue of where a person can afford to live?
why should goods and services be produced
How should goods and services be produced?
what goods and services should be produced?
who consumes the goods and services?
12
How do socialism and communism differ when it comes to government systems?
Soc. has centralized planning, communism has market forces.
Socialism can be democratic, communism is authoritarian.
Socialism allows private property, communism outlaws it.
Socialism is authoritarian, & communism can be democratic.
13
What might be the benefit of the gov providing a public good rather than the private sector?
increased taxes needed to provide the good
greater efficiency in providing the good
decreased prices for the good
decreased cost for the good
14
Which basic economic goal is most easily achieved in a traditional economy?
efficiency
equity
growth
innovation
15
A student volunteers at a food pantry on Fridays , which might be a negative externality?
The student's parents have to drive him or her
The student might make some new friends.
The student might learn a new skill.
The student might decide to volunteer two days a week
16
What are the three basic economic questions all societies must answer?
Who produces g&s, who consumes g&s, who collects the profits
where g&s get produced, who sells them,who gets the profits
what g&s get produced, how they are produced, who consumes
why should g&s get produced, when they get produced and how
17
A house is at the center of an eminent domain dispute, this person is most likely protesting
excess government regulation of the marketplace
lack of government enforcement of contracts
attempt by the gov. to take property for the public
government taxation of property owners
18
How is gross domestic product used to monitor the business cycle?
GDP shows if the nation's economy is expandingorcontracting.
GDP indicates whether a business is expanding or contracting
GDP shows if the world's economy is expanding orcontracting.
GDP shows if a city's economy is expanding or contracting.

Economic Systems Flashcards | StudBud