42 questions
Workers on an assembly line are an example of
allocation
entrepreneurs
homogenization
specialization
How does the activity in this image represent specialization?
The products being produced are specialized for each worker.
This worker is completing one of many parts of a final product.
This worker is making a product that is different from that of other workers.
This worker is performing many different steps in the production of a product.
New e-commerce businesses, including companies like eBay, focus on voluntary exchange. Which generalization BEST describes this type of commerce?
Decentralized decision-making requires large bureaucracy.
Centralized decision-making produces dramatic economic output.
Centralized decision-making results in buyers and sellers freely engaging in commerce.
Decentralized decision-making results in buyers and sellers freely engaging in commerce.
If two people are packing and delivering food, what is the most efficient way to do the job?
Both people pack and deliver as a team.
One person packs all the orders and the other delivers them.
One person packs on Monday while the other delivers and then they switch jobs.
One person packs half and delivers them; then the other packs the other half and delivers them.
In what way does specialization increase productivity?
Specialization reduces scarcity.
Specialization reduces the cost of production.
Specialization increases the demand for a product.
Specialized workers are generally more highly educated.
Although specialization increases productivity, one disadvantage is
loss of flexibility among workers.
higher costs in training workers.
a reduction in wasted time.
the loss of training time.
"Ryan tells Ty that he will give him his best Pokemon card in exchange for Ty's autographed baseball card. Ty feels this is a fair trade. However, when Ryan trades with Ty, Ryan gives him his second best Pokemon card instead."
Why was this trade not beneficial for both parties?
Ryan lied about what he was giving to Ty.
Ty lied about what he was giving to Ryan.
Baseball cards are worth more than Pokemon cards.
Pokemon cards are worth more than Baseball cards.
"Joe has purchased a new bike for $500. The taxes on the bike add another $30 to the total, making his final cost $530."
In this situation, the taxes paid by Joe are an example of
Opportunity cost
The law of supply
Voluntary exchange
Involuntary exchange
What is the primary purpose of job specialization?
regional self-sufficiency
increased consumer income
increased marginal utility
increased efficiency and productivity
In markets both parties are better off when they engage in voluntary, non-fraudulent exchange. What is the role of government in promoting such exchange?
There is no role for the government; the government only impedes exchange.
The governments role is to create legislation to prevent fraud.
The role of government is to make sure all individuals are treated equally.
The governments role is to make sellers make a profit and stay in business.
Even though Australia has great economic freedom, the government requires some products to meet safety and manufacturing standards. This means that overall Australia's economy can BEST be classified as a
mixed economy
market economy
command economy
traditional economy
Which nation's economy could be best described as a command economy, where the government determines guidelines for economic development and sets goals for economic production?
Australia
China
Japan
India
"Canada has a universal healthcare system, providing government-funded medical services to all citizens. However, the vibrant private sector helps to push an economy that is one of the world's most successful. Intense and frequent trade with the United States provides the country with great wealth."
These facts provide evidence that Canada has a
mixed economy
market economy
command economy
traditional economy
Approximately 50% of Iran's economy is planned by the nation's government, while in Israel that percentage is just over 10%. Which statement would MOST likely be true given this information?
Israel's oil industry is more profitable than Iran's.
There are more opportunities for entrepreneurs in Israel than in Iran.
Israel is more likely to be impacted by international sanctions than Iran.
High-tech industries are less-likely to be successful in Israel than they are in Iran.
"Brazil trades with the United States more than it does with any other country. Industrially, the private sector has made Brazil one of the most advanced countries in Latin America, with massive investment taking place since 1996. Still, over 1 million people live in state-owned housing and millions more are covered by government operated health care."
These facts show that Brazil has a
mixed economy
market economy
command economy
traditional economy
Despite a severely low amount of natural resources, Japan has a thriving economy. This is largely due to the freedom Japan's economy has had to explore and develop new technology. Such freedom is found in which type of economic system?
Command
Market
Socialist
Traditional
Which country has the GREATEST degree of a command economy?
Brazil
Canada
Cuba
Mexico
Under which economic system would factors of production MOST LIKELY be owned by the government?
mixed economy
natural economy
market economy
command economy
Which of these is a correct description of one of the ways in which a command economy differs from a market economy?
Market economies discourage free enterprise.
In a market economy, the government sets prices.
Command economies tend to have higher per capita GDP.
In a command economy, individuals have less economic freedom.
In which kind of economy are prices determined by supply and demand and by government actions?
command
market
mixed
traditional
In which kind of government are prices determined solely by supply and demand?
Command
Market
Mixed
Traditional
In which kind of economy are prices determined solely by the government?
Command
Market
Mixed
Traditional
The following statements BEST describes which type of economy: "the way things have always been"?
Command
Market
Mixed
Traditional
Freedom to own the factors of production, subsidized transportation services, and involuntary spending and investments are all examples of
mixed economies
market economies
command economies
traditional economies
In Cuba, a lottery system effectively decides who gets to purchase a car. Why would someone favor a lottery system over a price system in obtaining a desired item, such as cars?
Everyone has a chance to purchase the car since everyone can work for one.
Everyone eventually stops working to qualify for goods and services under the lottery system.
Everyone has an equal chance of having their name drawn instead of only those who can afford the car.
Everyone has an equal chance of affording a car instead of waiting on a lottery system for drawing the name.
Why is the price system a more efficient system for allocating scarce resources than by authoritarian means, such as in command economies?
Prices and the ability to make a profit will increase the supply of the scarce resources, thereby lowering prices and increasing demand.
Prices and the ability to create supply and demand will ensure that no scarce resource gets to a government that control supply lines.
The price system is not a more efficient system for allocation of goods and services and the government is a fair and impartial distribution center.
The government is not a fair source for allocation and will cheat and steal from most people to ensure that the rich and powerful are taken care of.
In this type of economic system, the production of goods and services is controlled solely by the concept of supply and demand, businesses are operated for profit, and the government is not involved.
Command
Communism
Market
Mixed
What fundamental question relates most directly to consumer sovereignty?
How will the system promote progress?
What goods and services will be produced?
How will the goods and services be produced?
Where will goods or services be offered for sale?
The command systems of the Soviet Union and eastern Europe failed in mostly because
Price ceilings were too low.
Economic resources that were abundant became very scarce.
Firms manufactured more output that consumers could purchase, resulting in an economic recession.
Central planning found it difficult to arrange the decisions of consumers, suppliers, and businesses.
"The country of South Africa has a growing economy that is one of the best in Africa. South Africa's annual GDP growth rate is almost 3%. Many private businesses are flourishing in the country. South Africa produces the majority of Africa's electricity. However, one of the major threats to South Africa's economy is the shortage of electricity to all areas of the country. Fortunately, the government of South Africa is presently addressing the problem by constructing and financing new electric power stations."
What kind of economic system does South Africa have?
Capitalism
Command
Mixed
Traditional
Consumer sovereignty assumes that which fundamental statement in a market economy is true?
Buyers should be able to name their own price for goods.
Sellers should provide products that reflect a good bargain.
Through purchase choices, buyers determine the production of goods.
By investing in research and development, sellers bring new products to the market.
In a command economy, how is it determined what goods and services will be produced?
Businesses decide what to produce on the basis of market conditions.
Consumers decide through their behavior in the marketplace.
Central government planning decides what will be produced.
Supply and demand control production and price.
Which statement is a PRIMARY characteristic of a capitalist system?
Graduated income tax.
Private ownership of property.
Equal distribution of resources.
Governmental regulation of business.
In 1776 with An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith challenged the prevailing belief in mercantilist policies. The characteristic of capitalism that buyers and sellers will freely and willingly exchange in market transaction is called
profit motive
economic freedom
voluntary exchange
entrepreneurial spirit
How might the purchase decisions of consumers impact a market economy?
By buying some products, but not others, consumers might determine what is produced.
When consumers buy products, the price of the product might decrease in response.
If firms increase the supply of a product, consumers might purchase more.
Where consumers decide to work might determine what is produced.
When an individual specializes to produce one good, and then acquires additional desired goods from other specialists,
Neither party gains as specialization decreases efficiency.
Both parties gain as a result of fraudulent exchange.
Neither party gains as specialization decreases productivity.
Both parties gain as a result of voluntary exchange.
In a command economy, how are the prices of goods and services determined?
Business owners
Independent agencies and independent regulators
Market forces of supply and demand
The central government
Communism and socialism are usually found in what type of economic system?
Traditional
Command
Pure market
Mixed market
In a market economy, prices are established by
Decree of government agencies.
Consumers and labor unions.
The interaction of supply and demand.
Businesses which buy and sell the products.
In capitalist economies, prices are
set by the central government.
used to ensure social equality.
determined by supply and demand.
usually unfair.
Why is the consumer considered "king" in a capitalist economy?
Consumers contribute to the factor market.
Consumers determine what products will be produced.
Consumers vote for elected government officials.
Consumers own the productive resources.
How do private property rights encourage individuals to work, save, and invest?
Individuals can keep the gains they earn.
Most earning of individuals will go to the government.
Any earnings or wealth cannot be passed on through inheritance.
Most investments are guaranteed by the government.