A Unique Quiz On Market System

25 Questions | By Ecofanics | Updated: Mar 20, 2022 | Attempts: 622

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Review for McConnell and Brue 15 ed.

Questions and Answers

1.

In a market system, the government owns most of the property resources (land and capital).
- A.
  
  True
- B.
  
  False
2.

Property rights encourage investment, innovation, exchange, maintence of property, and economic growth.
- A.
  
  True
- B.
  
  False
3.

The freedom of business firms to produce a particular consumer good is always limited by the desires of consumers for that good.
- A.
  
  True
- B.
  
  False
4.

The pursuit of economic self-interest is the same thing as selfishness.
- A.
  
  True
- B.
  
  False
5.

When a market is competitive, the individual sellers of a product are unable to reduce the supply of the product and control its price.
- A.
  
  True
- B.
  
  False
6.

The market system is also a communication system.
- A.
  
  True
- B.
  
  False
7.

The employment of capital to produce goods and services requires that there be "roundabout" production and it is more efficient than "direct" production.
- A.
  
  True
- B.
  
  False
8.

Increasing the amount of specialization in an economy generally leads to the more efficient use of its resources.
- A.
  
  True
- B.
  
  False
9.

One way human specialization can be achieved is through a division of labor in productive activity.
- A.
  
  True
- B.
  
  False
10.

Money is a device for facilitating the exchange of goods and services.
- A.
  
  True
- B.
  
  False
11.

"Coincidence of wants" means that two persons want to acquire the same good or service.
- A.
  
  True
- B.
  
  False
12.

Shells may serve as money if sellers are generally willing to accept them as money.
- A.
  
  True
- B.
  
  False
13.

One of the Four Fundamental questions is who will control the output.
- A.
  
  True
- B.
  
  False
14.

Business firms try to maximize their normal profits.
- A.
  
  True
- B.
  
  False
15.

Industries in which economic profits are earned by the firms in the industry will attract the entry of new firms.
- A.
  
  True
- B.
  
  False
16.

If firms have sufficient time to enter industries, the economic profits of an industry will tend to disappear.
- A.
  
  True
- B.
  
  False
17.

Business firms are only free to produce whatever they want in any way they wish if they do not want to maximize profits or minimize losses.
- A.
  
  True
- B.
  
  False
18.

The derived demand of a resource depends on the demands for the products the resource produces.
- A.
  
  True
- B.
  
  False
19.

Resources will tend to be used in those industries capable of earning normal or economic profits.
- A.
  
  True
- B.
  
  False
20.

Economic efficiency requires that a given output of a good or service be produced in the least costly way.
- A.
  
  True
- B.
  
  False
21.

If the market price of resource A decreases, firms will tend to employ smaller amounts of resource A.
- A.
  
  True
- B.
  
  False
22.

Changes in the tastes of consumers are reflected in changes in consumer demand for products.
- A.
  
  True
- B.
  
  False
23.

The incentive that the market system provides to induce technological improvement is the opportunity for economic profits.
- A.
  
  True
- B.
  
  False
24.

The tendency for individuals pursuing their own self-interests to bring about results that are in the best interest of society as a whole is often called "the invisible hand".
- A.
  
  True
- B.
  
  False
25.

A basic economic argument for the market system is that it promotes the efficient use of resources.
- A.
  
  True
- B.
  
  False