Econ Ch 2 Economic Systems

Which of the following was a free market philosopher?

• Karl Marx

• Adam Smith

• Vladimir Lenin

• Friedrich Engels

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

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

What incentive motivates a manufacturer to sell a product?

• making profits on sales

• putting others out of business

• pleasing the consumer

• popularity of the product

How could the Chinese economy be characterized?

• free market

• centrally planned

• mixed, but on the side of centrally planned

• mixed, but on the side of free market

Which of the following 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 consumer's business called?

• socialism

• competition

• incentive

• self regulation

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 an economy?

• It eliminates unemployment

• It makes it more efficient

• It fosters competition

• It makes it easier to control

Which of the following is characteristic of a traditional economy?

• Communities 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 did