Chapter 5 Economics Test

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  • 1/25 Questions

    What viewpointt leads nations to introduce food stamps, social secruity, and housing assistance?

    • Safety-net egalitarianism
    • Libertarianism
    • Economic leveling
    • Communism
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About This Quiz

This test covers economic principles and theories, exploring concepts like labor income, market solutions, and views on communism and economic fairness.

Chapter 5 Economics Test - Quiz

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  • 2. 

    Which of the following is a consumer good?

    • An aoutomobile

    • A tractor

    • A printing press

    • A welding machine

    Correct Answer
    A. An aoutomobile
    Explanation
    An automobile is considered a consumer good because it is primarily used for personal transportation by individuals. It is designed and manufactured for the general public to purchase and use for their own personal use. Unlike a tractor, printing press, or welding machine, which are typically used for commercial or industrial purposes, an automobile is intended for personal use and consumption.

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  • 3. 

    Which of the following statements is true of communism?

    • It offers a way to perfect society by human effort.

    • It condems revolution

    • It approves of greed.

    • It was widely accepted in Europe when it was first introduced.

    Correct Answer
    A. It offers a way to perfect society by human effort.
    Explanation
    Communism is a socio-economic ideology that advocates for the abolition of private property and the establishment of a classless society. It believes that society can be perfected through collective human effort, where resources are shared equally among all members. This approach aims to eliminate social inequality and create a utopian society. However, it does not condemn revolution, as it often encourages the overthrow of capitalist systems to achieve its goals. Additionally, communism does not approve of greed, as it promotes the idea of working for the collective good rather than individual gain. While communism gained popularity in certain European countries, it was not widely accepted when it was first introduced.

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  • 4. 

    What is the distirbution question that every society must answer?

    • Ho will the nation's oods be produced?

    • Who will recieve the goods that are produced?

    • How many goods will be produced?

    • What types of goods will be produced?

    Correct Answer
    A. Who will recieve the goods that are produced?
    Explanation
    Every society must answer the distribution question of who will receive the goods that are produced. This question addresses the issue of how resources and products are allocated among individuals and groups within a society. It involves determining factors such as income distribution, social welfare programs, and economic policies that govern the fair and equitable distribution of goods and services.

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  • 5. 

    What is the command solution to the output question?

    • A committee decides the consumer good/capital good tradeoff.

    • The interest rate decides the comsumer good/capital god tradeoff

    • A committee chooses the labor intensive/capital intensive combination

    • Individual firms choose the labor intensive/capital intensive combination

    Correct Answer
    A. A committee decides the consumer good/capital good tradeoff.
  • 6. 

    Which of the following principles is most clearly taught in Scripture?

    • The primary means by which people should obtain income is through their own labor.

    • The governement should provide a "safety net" for the truly poor

    • Christians should not be concerned about the poor because poverty is a fact of life

    • Everyone has a right to equal economic benefits regardless of productivity

    Correct Answer
    A. The primary means by which people should obtain income is through their own labor.
    Explanation
    The correct answer is the principle that the primary means by which people should obtain income is through their own labor. This principle is supported by various passages in Scripture that emphasize the importance of hard work, personal responsibility, and the value of labor. For example, in 2 Thessalonians 3:10, it states, "For even when we were with you, we gave you this rule: 'The one who is unwilling to work shall not eat.'" This teaches that individuals should not rely solely on others or the government for their income, but rather should work diligently to provide for themselves and their families.

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  • 7. 

    What concept is the source of the phrase "economic darwinism'?

    • Survival of the fittest

    • Egalitarian fainess

    • Economic leveling

    • Communism

    Correct Answer
    A. Survival of the fittest
    Explanation
    The concept of "economic darwinism" is derived from the idea of "survival of the fittest." This phrase suggests that in the economic realm, only the strongest and most competitive individuals or businesses will thrive and succeed, while others will fail. It implies that the market operates similarly to Darwin's theory of natural selection, where those who are better adapted to their environment will survive and reproduce, while those who are not will be eliminated. This concept highlights the competitive nature of the economy and the belief that success is determined by individual merit and ability.

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  • 8. 

    Which of the following statements is not found in Scripture?

    • 'If any would not work, neither should he eat."

    • "Ye have the poor with you always."

    • "If thou wilt be perfect, go and sell that thou hast, and give to the poor."

    • 'For this cause are the powers ordained of God, to distribute to the poor and fearless."

    Correct Answer
    A. 'For this cause are the powers ordained of God, to distribute to the poor and fearless."
  • 9. 

    What is a major advantage of a labor intensive business over a capital intensive business?

    • Low unemployment

    • Few hidden costs

    • Reliable rate of productivity

    • Increase in the average indiidual income

    Correct Answer
    A. Low unemployment
    Explanation
    A major advantage of a labor-intensive business over a capital-intensive business is low unemployment. This means that a labor-intensive business relies heavily on human resources, employing a large number of workers. As a result, it creates more job opportunities and helps to reduce the overall unemployment rate in the economy. In contrast, a capital-intensive business heavily relies on machinery and technology, requiring fewer workers. Therefore, it may not contribute as significantly to reducing unemployment levels.

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  • 10. 

    Which o fthe following staements is a viewpoint of egalitarian fairness?

    • Wealth should be distributed primarily to those who satisfy the needs of other

    • Society is obligated to protect the poor from the most devastating economic hardships

    • If a person is unable to earn a living because of a lack of education, it is responsibilities to secure a marketable skill

    • If a person has a physical limitation, it is his responsibility to seek private charity

    Correct Answer
    A. Society is obligated to protect the poor from the most devastating economic hardships
    Explanation
    The viewpoint of egalitarian fairness is reflected in the statement that "Society is obligated to protect the poor from the most devastating economic hardships." This statement suggests that in order to achieve fairness, society has a responsibility to ensure that the most vulnerable individuals are protected from severe economic difficulties. It implies a belief in providing assistance and support to those who are less fortunate, in order to create a more equal and just society.

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  • 11. 

    What is meant by the "consumer good/capital good tradeoff"?

    • The same business cannot produce both capital goods and consumer goods.

    • Every business must sell its capital goods for cnsumer goods, and vice versa

    • Business that produce consumer goods cause the production of capital goods to suffer, and vice versa

    • Businesses should trade both consumer goods and capital goods with foreing business

    Correct Answer
    A. Business that produce consumer goods cause the production of capital goods to suffer, and vice versa
    Explanation
    The "consumer good/capital good tradeoff" refers to the idea that businesses that focus on producing consumer goods may experience a decrease in the production of capital goods, and vice versa. This tradeoff occurs because resources such as time, money, and labor are limited, and allocating them towards the production of one type of good may result in a decrease in the production of the other type. Therefore, businesses need to make strategic decisions on how to balance the production of consumer goods and capital goods based on their priorities and market demand.

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  • 12. 

    What is a command solution to the distribution nquestion?

    • Libertarian solution

    • Egalitarian fairness

    • Interest rates

    • Labor intensive firms

    Correct Answer
    A. Egalitarian fairness
    Explanation
    The correct answer is egalitarian fairness. Egalitarian fairness refers to a command solution that aims to distribute resources and benefits equally among individuals. In this context, it suggests that the distribution question should be resolved by prioritizing equal distribution and fairness among all parties involved. This approach focuses on minimizing inequalities and ensuring that everyone receives an equal share, regardless of their individual circumstances or contributions.

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  • 13. 

    What is the input uestion that every society must answer?

    • How will the nations good be produced?

    • Who will recieve the goods that are produced?

    • How many goods will be produced?

    • What types of goods will be produced?

    Correct Answer
    A. How will the nations good be produced?
    Explanation
    The question is asking about the input question that every society must answer. Out of the given options, "How will the nations good be produced?" is the most appropriate input question that every society must address. This question relates to the production and allocation of goods within a nation, which is a fundamental aspect of any society's economic system. It involves determining the methods, resources, and processes through which goods are produced and distributed to meet the needs and wants of the population.

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  • 14. 

    What is a major advantage of using automated equipment instead of labor?

    • Cheap maintenance

    • Versatile application

    • Small cost of new investment

    • Nearly constant rate of productivity

    Correct Answer
    A. Nearly constant rate of productivity
    Explanation
    Automated equipment offers a major advantage over labor in terms of a nearly constant rate of productivity. Unlike human workers, machines do not experience fatigue or require breaks, allowing them to work consistently and efficiently without any decrease in productivity. This can result in higher output levels and improved overall efficiency in various industries.

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  • 15. 

    Which of the following is a capital good?

    • A toaster

    • A house

    • Medicine

    • A plow

    Correct Answer
    A. A plow
    Explanation
    A capital good is a type of asset that is used in the production of goods or services. It is not meant for immediate consumption but rather for long-term use in the production process. In this case, a plow is considered a capital good because it is used in agriculture to prepare the soil for planting crops. It is not consumed directly but rather helps in the production of food. The other options, such as a toaster, house, and medicine, are not capital goods as they are either meant for immediate consumption or for personal use rather than production.

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  • 16. 

    If a business is seeking intensive growth, one of its goals might be

    • To achieve 0% unemployment

    • To tap new natural resources

    • To train uneducated employees

    • To increase its financial capital

    Correct Answer
    A. To train uneducated employees
    Explanation
    A business seeking intensive growth may prioritize training uneducated employees as one of its goals. By investing in the education and skill development of its workforce, the business can enhance their productivity and capabilities, leading to increased efficiency and competitiveness. This can help the business expand its operations, improve its products or services, and ultimately achieve growth in terms of market share, revenue, and profitability.

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  • 17. 

    What is a market solution to the distribution question?

    • Libertarian fairness

    • Egalitarian fairness

    • Interest rates

    • Labor intensive firms

    Correct Answer
    A. Libertarian fairness
    Explanation
    A market solution to the distribution question refers to the concept of libertarian fairness. This means that the distribution of resources and wealth is determined by the free market, without government intervention or regulation. In a market solution, individuals are free to engage in voluntary transactions and pursue their own self-interests, leading to an allocation of resources based on supply and demand. This approach emphasizes individual liberty and economic freedom, allowing for a decentralized decision-making process in the distribution of goods and services.

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  • 18. 

    Which of the following is not a primary economics goal of societies?

    • Fair distibution of income

    • Low unemmployment

    • Stable productivity

    • Stable prices

    Correct Answer
    A. Stable productivity
    Explanation
    Stable productivity is not a primary economic goal of societies. While it is important for economic growth and efficiency, the primary goals typically include fair distribution of income, low unemployment, and stable prices. Stable productivity refers to the consistent output per unit of input, and although it is desirable, it is not considered a primary goal as it is more of a means to achieve other economic objectives.

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  • 19. 

    What is the market solution to the input question?

    • A committee decides the consumer good/capital good tradeoff.

    • The interest rate decides the comsumer good/capital god tradeoff.

    • A committee chooses the labor intensive/capital intensive combination

    • Individual firms choose the labor intensive/capital intensive combination

    Correct Answer
    A. Individual firms choose the labor intensive/capital intensive combination
    Explanation
    In a market solution, individual firms have the freedom to make decisions regarding the labor intensive/capital intensive combination based on their own preferences and market conditions. This allows firms to choose the combination that best suits their needs and maximizes their profits. The other options, such as a committee deciding the tradeoff or the interest rate determining the tradeoff, do not align with the concept of individual firms making their own choices in a market economy.

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  • 20. 

    What is the market solution to the output question?

    • A committee decides the consumer good/capital good tradeoff.

    • The interest rate decides the comsumer good/capital god tradeoff.

    • A committee chooses the labor intensive/capital intensive combination

    • Individual firms choose the labor intensive/capital intensive combination

    Correct Answer
    A. The interest rate decides the comsumer good/capital god tradeoff.
  • 21. 

    Why is it deceitful for the Soviet Union to claim that its past economic growth was a benefit of command solutions to the economy?

    • The growth was actually achieved through market solutions.

    • The growth was made possible by untapped resources, ot government policy.

    • The growth was actually achieved through foreing investments

    • The growth never took place

    Correct Answer
    A. The growth was made possible by untapped resources, ot government policy.
    Explanation
    The correct answer suggests that the Soviet Union's claim of economic growth through command solutions is deceitful because the growth was actually made possible by untapped resources and government policy. This implies that the growth was not a result of the command solutions implemented by the Soviet Union, but rather due to other factors such as the availability of untapped resources and specific government policies.

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  • 22. 

    During the 1950'2 the command-regulated Soviet Union expierenced phenomenal growth in productivity due to

    • Intensive growth

    • Extensive growth

    • Labor intensive business

    • Egalitarain fairness

    Correct Answer
    A. Extensive growth
    Explanation
    During the 1950s, the command-regulated Soviet Union experienced phenomenal growth in productivity due to extensive growth. This means that the country focused on expanding its production capacity and increasing output by investing in new infrastructure, technology, and resources. This approach allowed the Soviet Union to rapidly industrialize and develop various sectors of its economy, leading to significant economic growth during this period.

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  • 23. 

    What is the output question that every society must answer?

    • How will the nation's goods be produced?

    • Who will recieve the goods that are produced?

    • How many goods will produced?

    • What type os godos will be produced?

    Correct Answer
    A. What type os godos will be produced?
    Explanation
    The correct answer is "What type of goods will be produced?". This question refers to the fundamental economic problem of resource allocation, as societies must decide what goods and services to produce given limited resources. This decision impacts the overall economy and the well-being of individuals within the society.

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  • 24. 

    What is the most obvious consequence of rapidly rising prices?

    • Unemployment

    • Unfair distribution of income

    • Decreased savings

    • Decreased spending

    Correct Answer
    A. Unfair distribution of income
    Explanation
    Rapidly rising prices can lead to an unfair distribution of income. When prices increase quickly, individuals with fixed incomes or lower wages may struggle to afford basic necessities, while those with higher incomes can still afford the increased prices. This creates an inequality in the distribution of income, as the gap between the rich and the poor widens.

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  • 25. 

    What is the command solution to the input question?

    • A committee decides the comsumer good/capital ood tradeoff

    • The interest rate decides the comsumer good/capital tradeoff

    • A committee chooses the labor intensive/capital intensive combination

    • Individual frims choose the labor intensive/capital intensive combination.

    Correct Answer
    A. A committee chooses the labor intensive/capital intensive combination

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  • Current Version
  • May 27, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 22, 2009
    Quiz Created by
    Taliiaxo22
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