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- 1. Multiple Choice
In a market economy, the basic economic decisions are driven by?
Governments
individuals
business owners
banks
- 2. Multiple Choice
Which of the following charicteristics does NOT describe the features of a command economy?
Scarcity and rationing of goods often occur
the market is inefficient
Individuals can decide what to produce and how much to produce
there are fewer choices than in a market economy
- 3. Multiple Choice
Which group of people ultimately determines the products that a command economy produces?
consumers
property owners
Government Officials
Companies
- 4. Multiple Choice
Capitalism is associated with all of the following characteristics EXCEPT __________
personal decisionmaking with regard to investments
the right to earn a profit based on individual effort
personal ownership of property
government intervention in the economy's decision making process
- 5. Multiple Choice
Cuba is clearly pursuing a gradual shift from a command to a market economy. Which of the following is NOT a possible benefit that could result from these economic reforms?
Workers who work harder could get paid more than usual
There could be more production than before the reform
Cuba could have higher GDP growth
Workers could have a guaranteed income
- 6. Multiple Choice
How can you determine that an economic transaction is voluntary?
Because I read the news
Because I make rational decisions?
Because I act of my own free will
Because I have complete access to information
- 7. Multiple Choice
In a market economy, prices of goods and services are kept fixed
True
False
- 8. Multiple Choice
People tend to work harderwhen an employer promises to increase their wages. The hard work is an effect of the incentive provided by the employer.
True
False
- 9. Multiple Choice
Which of the following characteristics does NOT belong to a market economy?
private ownership
voluntary market exchange
governement price setting
incentives
- 10. Multiple Choice
In wich of the following situations is private ownership not guaranteed?
Jane's business was closed because the landlord increased the rent and she could no longer afford to stay open
Jane's business was closed because of the recent strong winds
Jane's business was closed because of low sales due to Covid-19
Jane's business was closed because the government wanted to reduce competition with state-owned businesses
- 11. Multiple Choice
Matching: Guarantees Individuals the right to own property and use it in any legal way they would like
Voluntary exchange
Market economy
Command economy
Market incentives
Private ownership
- 12. Multiple Choice
Matching: System in which the government makes most of the economic decisions
Voluntary exchange
Market economy
Command economy
Market incentives
Private ownership
- 13. Multiple Choice
Matching: System in which buyers and sellers interact freely and willingly in market decisions
Voluntary exchange
Market economy
Command economy
Market incentives
Private ownership
- 14. Multiple Choice
Matching: Driving force that encourages peple and organizations to increase their benefits and reduce their cost
Voluntary exchange
Market economy
Command economy
Market incentives
Private ownership
- 15. Multiple Choice
Matching: Occurs when buyers and sellers make informed, rational, and unforced decisions
Voluntary exchange
Market economy
Command economy
Market incentives
Private ownership
- 16. Multiple Choice
What is the typical distribution process used with manufactured goods?
Producer -> wholesaler -> stores -> customers
Producer -> customers -> wholesaler -> stores
Producer -> wholesaler -> customers -> stores
Producer -> stores -> customers -> wholesaler
- 17. Multiple Choice
According to the "invisible hand" theory, how can self-interest benefit society?
by frequently producing what consumers what
by trying intentionally to benefit society
self-interest can never benefit society
self-interest always benefits society
- 18. Multiple Choice
Entrepreneurs are motivated to invest due to _______ .
income from wages
payments received for the use of land
A potential for capital gain
the security of guaranteed income
- 19. Multiple Choice
No one person needs to know how to construct a pencil in its entirety because of _________ .
specialization
the expense of constructing a pencil
the lack of knowledge of constructing a pencil
government intervention
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