Economics Chapter 2

Which of the folowing is NOT characteristic of a centrally planned economy

• The central government owns all land and capital

• The central government makes all economic decisions

• Each collective or factory sets its own goals

• Each person is assigned a job

what is the struggle among various producers for the consumers business called

• socialism

• competition

• incentive

• self-regulation

Why does even a free market economy need some government intervention

• to provide for things that the marketplace does not address

• to ensure that the government has the freedom to tax as necessary

• to make sure that the government can fulfill its needs for military personnel

• so that the government has some control over factor resources

which of the following is NOT a key economic question

• what goods and services should be produced

• How should these goods and services be produced

• Who consumes these goods and services

• How should it be ensured that goods and services are paid for

What does the process of specialization do for any economy

• It eliminates unemployement

• it makes it more efficent

• it fosters comeption

• It makes it easier to control

How could the Chinese economy be characterized

• free market

• centrally planned

• mixed, but on the side of centrally planned

• mixed, bot on the side of free market

What is one of the most important advantages of a free market

• It can change rapidly

• It protects the less fortunate

• it is easy to regulate

• it encourages growth

What incentive motivates a manufacturer to sell a product

• making profits on sales

• putting other out of business

• pleasing the consumer

• popularity of the product

Which of the following was a free market philosopher

• Karl Marx

• Adam Smith

• Vladimir Lenin

• Friedrich Engels

Which of the following is characteristic of a traditional economy

• Communitites tend to be fast-growing

• they are usually based on light industrial production

• they have a high standard of living

• Children tend to have the same jobs as their parents