Econ Ch. 2

Which of the following is NOT a strength of a market economy?

• a. It can adjust to change over time.
• b. It gives producers and consumers freedom.
• c. It has decentralized decision making.
• d. It supports all of its people equally.

All of the following are characteristics of capitalism EXCEPT

• a. private property rights
• b. economic freedom.
• c. profit motive.
• d. government control.

Who plays the roles of protector, consumer, regulator, and promoter of economic goals in the
United States?

• a. government
• b. entrepreneurs
• c. businesses
• d. workers

A market economy 

• a. offers a high degree of certainty for its workers.
• b. limits the choices of goods and services available.
• c. permits extensive government intervention.
• d. does not provide for everyone's basic needs.

In a market economy, a low price is a signal for

• a. producers to produce more and buyers to buy less.
• b. producers to produce more and buyers to buy more.
• c. producers to produce less and buyers to buy less.
• d. producers to produce less and buyers to buy more.

A major disadvantage of capitalism is that it

• a.ignores poor people and the less productive members of society.
• b.provides for too much individual freedom.
• c.relies on supply and demand to set prices.
• d.answers the basic economic questions in a decentralized manner.

What is the fundamental problem of economics?

• a. scarcity 
• b. the factors of production
•  c. capital
• d. labor

The money used to buy the tools and equipment needed for production is known as

• a. capital goods.
• b. the factors of production
• c. wealth
• d. financial capital..

Which of the following lists are the factors of production?

• a. land, labor, wants, entrepreneurs 
• b. land labor, capital, scarcity
• c. labor, needs, capital, entrepreneurs 
• d. land labor, capital, entrepreneurs

Manufactured goods needed to produce other goods and services are called

• a. capital goods
• b. nondurable goods
•  c. Gross Domestic Product (GDP).
• d. consumer goods.