Economics Unit 2

In this type of economic system, the government controls all aspects of the economy and makes all decisions about what goods will be produced, who will produce them, and how they will be produced.

• Command

• Market

• Mixed

• Traditional

In capitalist economies, prices are

• usually unfair

• set by the central government

• used to ensure social equality

• determined by supply and demand.

Buyers and sellers decide to complete a transaction and agree that they are better off, this is called:

• Barter

• Voluntary Exchange

• Profit

• Free Enterprise

Which fundamental type of economy best describes the United States?

• Market Economy

• Republican Economy

• Traditional Economy

• Command Economy

Which of the following is not a major characteristic of a free enterprise economy?

• Private Property Rights

• Competition

• Profit Motive

• Government Regulation

In a free enterprise system, what motivates individuals to start a business?

• the risk of failure

• the need for job security

• the desire to earn a profit

• the desire to make economic decisions

The idea that buyers have all of the power in a market is known as:

• Purchasing Power

• Standard of Living

• Consumer Sovereignty

• Fixed Income

· Decentralized decision making.

· Adjusts to changes in the market place.

· Producers and consumers have control of the economy.

All of the above are characteristics of:

• a traditional economy

• a socialist economy

• a command economy

• a market economy

Which of the following is not a role of entrepreneurs in a capitalist economy?

• Be a sparkplug/catalyst for the economy

• Use profit motive to ensure better products

• Use factors of production to make a profit

• Save profits & do not reinvest in the economy

Someone who creates a system to offer a product or service in order to obtain a profit is called

• a capitalist

• a businessman

• an opportunist

• an entrepreneur