A Unique Quiz On Market System

25 Questions | Attempts: 622

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A Unique Quiz On Market System - Quiz

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

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