Ch. 2 Economics (Markets)

30 Questions | By Ediazjr | Updated: Mar 22, 2022 | Attempts: 795

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This quiz covers 3 economic systems and the economists most associated with them. It covers the freedom index that rates the freedom of economies around the world and the characteristics of American Free enterprise.

Questions and Answers

1.

Adam Smith’s idea that competition and a person’s self-interest would regulate the economy without the need for government intervention.
- A.
  
  Free Market
- B.
  
  Socialism
- C.
  
  Communism
- D.
  
  Inbisible Hand
- E.
  
  Capitalism
2.

A term describing a political and economic system where the government has control of all the factors of production and attempts to distribute resources without a democratically elected government.
- A.
  
  Socialism
- B.
  
  American Free Enterprise
- C.
  
  Communism
- D.
  
  Centrally Planned Economy
3.

An economic system that believes democracy should be used to distribute wealth evenly throughout society and in in which the government controls some of the factors of production but there are some forms of private enterprise and democracy.
- A.
  
  American free enterprise
- B.
  
  Mixed market
- C.
  
  Communism
- D.
  
  Socialism
4.

In his book. the Communist Manifesto, he argued that a centrally planned economy would best regulate the economy to distribute resources equally.
- A.
  
  Adam Smith
- B.
  
  Karl Marx
5.

In his book, Wealth of Nations, he argued that a free market system reduces waste and regulates the economy in the most efficient manner. He explained his ideas using the "invisible hand" theory.
- A.
  
  Adam Smith
- B.
  
  Karl Marx
6.

The invisible hand is associated helps explain what type of economic system?
- A.
  
  Free markets (market economies)
- B.
  
  Centrally (command) planned markets
- C.
  
  Traditional markets
- D.
  
  Mixed markets
7.

Which of the following is a problem for a centrally planned economy?
- A.
  
  Few economic freedoms and choices
- B.
  
  Wealth is distributed unequally
- C.
  
  Family traditions interfere with economic decisions.
- D.
  
  There is no government safety net for the poor
8.

Which of the following is a problem for a free market economy?
- A.
  
  Very few economic choices
- B.
  
  Not enough competition exists
- C.
  
  Big gap between the poor and the wealthy
- D.
  
  No economic freedom
9.

What is an advantage of the free market system (market system)
- A.
  
  Equal distribution of resources.
- B.
  
  Competition leads to innovation of new products.
- C.
  
  There is an extensive safety net for the poor that ensures equality.
- D.
  
  The government makes most decisions for its citizens.
10.

A government controlling the price of goods is an example of a free market economy
- A.
  
  True
- B.
  
  False
11.

The Untied States is an example of a mixed market economy.
- A.
  
  True
- B.
  
  False
12.

There is no true mixed economy in the world.
- A.
  
  True
- B.
  
  False
13.

Cuba is an example of a Centrally planned (command market) economy.
- A.
  
  True
- B.
  
  False
14.

Selling government businesses and services to the private sector is called _________ ector.
- A.
  
  Privatization
- B.
  
  Nationalization
- C.
  
  Business Freedom
- D.
  
  Property Rights
15.

This graphic shows what type of economic market system?
- A.
  
  Centrally Planned Economy
- B.
  
  Free market Economy
- C.
  
  Traditional Economy
- D.
  
  Mixed Market Economy
16.

This shared good or service is often a response to a market failure. It is not paid by individual consumers, nor are free riders easily excluded.
- A.
  
  Public Good
- B.
  
  Laissez Faire
- C.
  
  Invisible Hand
- D.
  
  Positive Externality
17.

Which of the following is NOT one of the three economic questions every society has to answer?
- A.
  
  What to produce
- B.
  
  How much to charge
- C.
  
  How to produce
- D.
  
  Who gets it
18.

Which economic system best describes the United States economic system?
- A.
  
  Traditional economies
- B.
  
  Mixed economies
- C.
  
  Centrally planned (command) economies
- D.
  
  Market (free) economies
19.

Which of the following is the best example of a mixed economy?
- A.
  
  North Korea
- B.
  
  Hong Kong
- C.
  
  Cuba
- D.
  
  United States
20.

Refers to the idea that the government should not be involved in the economic decisions, in other words it should "let it be".
- A.
  
  Laissez Faire
- B.
  
  Communism
- C.
  
  Deficit spending
- D.
  
  The safety net
21.

Temporary Assistance For Needy Families (TANF) is an example of the government's safety net for the poor
- A.
  
  True
- B.
  
  False
22.

Which of the following is NOT an example of a public good?
- A.
  
  Google
- B.
  
  U.S. Army
- C.
  
  Highway 141
- D.
  
  Pattee park
23.

Drilling for oil in the rain forest creates _____________externalities for humans.
- A.
  
  Positive
- B.
  
  Negative
- C.
  
  Both positive and negative
- D.
  
  Neither positive nor negative
24.

The graphic above shows an example of what economic concept?
- A.
  
  Public good
- B.
  
  Positive externality
- C.
  
  Negative externality
- D.
  
  Government safety net
25.

The U.S. government announces 15 year olds can now work the midnight shift on school nights is a movement towards what type of economic system?
- A.
  
  Free Market
- B.
  
  Centrally Planned
- C.
  
  Traditional economy