Unit 1b (SSEF3-SSEF6) Summative Review

Rationing is a system under which an agency such as the government decides everyone's "fair" share. Rationing has often been used during wartime. If people receive a set ration regardless of the amount of work completed, how would this affect peoples' incentive to work?

• People might feel less inclined to work.

• The incentive to work will not change.

• There is no effect on the incentive to work.

• People might feel more inclined to work.

A government that operates in a market economy MIGHT become involved in the economy

• to make sure all products are produced the same way.

• to eliminate income inequality among its citizens.

• to increase the profits of a specific company.

• to provide public goods and services to its citizens.

Which of these is MOST LIKELY a result of a high unemployment rate in the United States?

• increased revenues

• increased demand for consumer goods

• increased production of capital goods

• greater government expenditures for transfer payments

How do private property rights contribute to a capitalist system?

• Businesses can determine what to produce based on consumer demand.

• High quality products and reasonable prices are guaranteed.

• The government owns most of the factors of production.

• Individuals are free to own the resources used to produce goods.

Some products (such as roads, sewer systems, and railroads) are not adequately supplied by the marketplace acting alone. Therefore, choices about building such things are made by

• stockholders

• private corporations

• governments

• referendums

For a market economy to function well, it is MOST important that laws be passed to protect the right to

• political dissent

• privacy

• property

• free travel

Which statement describes an opportunity cost that could result from the government regulating businesses?

• Lead to an increase in product safety.

• Consumer protection declines as a result of government regulations.

• Government regulations can lead to an increase in production costs.

• Less recalls occur as a result of government regulations.

In a society with a market economy, property rights are generally enforced by

• the consumers

• the banks

• the courts

• the producers

Investment in education, training, and skill development has been linked to

• declining job satisfaction.

• increasing earnings for workers.

• decreasing political participation.

• growing financial instability.

Increased education and training within a nation will most likely result in

• a decrease in Gross Domestic Product (GDP).

• an increase in the presence of natural resources.

• a decrease in entrepreneurship.

• an increase in Gross Domestic Product (GDP).