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Economic Systems Test Review
Economic Systems Test Review
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economic systems review
Flashcards
32 cards
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Questions
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Answers
1
Economics is about the production of goods and services, which requires the allocation of
benefits
utility
consumption
resources
2
The type of economy a country has is determined by the amount of ____.
Government involvement
Judicial review
Circular flow
Economic interest
3
Karl Marx encouraged workers to improve their lives by
electing union representatives.
participating in local government.
overthrowing the Capitalist system.
demanding pensions and disability insurance.
4
Which of the following is an advantage of capitalist economies?
There is centralized control of goods and services.
There is an absence of competition
Everyone has a specific role in the economy.
There is an opportunity to create wealth.
5
Which of the following is a characteristic of a traditional economy?
It provides workers with few incentives to work hard.
It has a great deal of economic freedom.
It discourages new ideas and new ways of doing things.
Public services are available at little or no cost.
6
Which of the following is an example of a good?
haircut
banking
automobile
concert
7
What are all the basic resources used to make all goods and services called?
Natural resources
Services
Factors of production
Goods
8
You will most likely find traditional economic systems in developed countries.
False
True
9
Having little initiative is a drawback in what two economic systems?
Socialism & Communism
Capitalism & Traditional
Communism & Capitalism
Traditional & Socialism
10
Economic scarcity is also known as opportunity cost.
False
True
11
Under which system would all property be held in common and have no need for classes?
Socialism
Capitalism
Communism
Mixed economy
12
Millionaires face the problem of scarcity.
True
False
13
Capitalism thrives on competition. What is the main benefit of competition?
marginal costs and benefits
lower prices
a successful democracy
better decision making
14
Which of the following is
not
a question all societies must ask?
Where to produce?
How to produce?
For whom to produce?
What to produce?
15
All of the following are characterisitcs of Communism EXCEPT
Redistribution of wealth
Total government control
Rise of the proleteriat
laissez-faire economic policy
16
What is laissez-faire economics?
The economy should be controled by the gov't.
Little gov't interference in the economy
Some of the FOP are owned by the gov't to help the workers.
The Bourgeosie should be taxed at a higher rate.
17
When deciding b/w renovating a power plant or building an arts center, what is the gov't most likely to consider?
scarcity v. resources
consumers v. producers
wages v. prices
wants v. needs
18
An entrprenuer is a person
who invests time and money to start a business.
All of the above.
who takes a risk to make a profit.
who combines the FOP to make a profit.
19
GDP
total income minus taxes, savings, and spending on exports
is the monetary value of all goods and services produced in a year.
takes into consideration NDP.
is the economic value of all economic resources used in a year.
20
According to economic theory, when does scarcity occur?
when inflation occurs and demand for goods and services increases
when inflation occurs and demand for goods and services decreases
when there are not enough resources to produce things a society wants
when there are more resources than it needs to produce goods & services
21
An autoworker is considered ________ and earns ________.
labor, income
entrepreneur, profit
capital, wages
labor, rent
22
What are the major characteristics of capitalism?
competition, profit, and government ownership of resources
government set prices and private property
markets, private property, competition, and profits
competition, profit, and production based on custom and tradition
23
What are the factors of production?
natural resources, capital, goods, and services
natural resources, labor, capital, and money
natural resources, money, labor, and entrepreneurs
natural resources, labor, capital, and entrepreneurs
24
Prices in capitalist economics are
determined, in most cases, by the federal government.
a reflection of our basic values.
unfair.
determined by supply and demand.
25
What is Clayton's opportunity cost if he works after school Monday - Friday?
The extra money he could earn
The additional hours he spends at the job
The time he could spend studying
The new clothes he could buy
26
The study of economics is important because it enables us to
determine what goods ought to be produced.
describe our standard of living.
become better decision makers.
increase our consumption of consumer goods.
27
In a command economy
laws are set up to answer the fundamental economic questions.
the central government dictates the answers to the economic questions
competition help answer the economic questions.
the market dictates the answers to the fundamental economic questions
28
In Socialism, the middle and upper class have a heavier tax burden.
False
True
29
Economics is best defined as the study of how people, businesses, governments, and societies...
use their infinite resources.
choose abundance over scarcity.
attain wealth.
make choices to cope with scarcity.
30
In The Communist Manifesto, Karl Marx expressed the idea that
power should be determined by a person’s wealth
religion should be the most important factor in society
profits from work should belong to the workers
supply and demand should control prices
31
Which FOP is defined as the manufactured goods used to make other goods/ services?
labor
entrepreneur
land
capital
32
The concept of the "invisible hand" refers to...
government intervention.
All of the above
the federal government setting interest rates.
individuals making decisions based on their own self interest
