Market Economy Review

In a market economy, the basic economic decisions are driven by?

• Governments

• individuals

• business owners

• banks

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

Which group of people ultimately determines the products that a command economy produces?

• consumers

• property owners

• Government Officials

• Companies

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

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

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

In a market economy, prices of goods and services are kept fixed

• True

• False

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

Which of the following characteristics does NOT belong to a market economy?

• private ownership

• voluntary market exchange

• governement price setting

• incentives

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