European Economics

Which of the following is an advantage of a market economy?

• limited consumer choices

• control of the price of labor

• ability to sell goods at a high price

• it adjusts to changes over time

How are the prices of goods and services determined in a command economy such as the Soviet Union, North Korea, or Cuba?

• The business owners agree on it

• The government decides what it will be

• The market forces of supply and demand decide

• Independent agencies and regulators make the choice

Why was the European Union originally set up?

• Free trade with member countries

• No tariffs from the USA

• Only quotas can be used as trade barriers

• No one trades with Europe

Placing a cost onto trade that raises the price of the traded goods or services is a

• trade deficit

• trade incentive

• trade surplus

• trade barrier

The people who work on an assembly line are examples of

• allocation

• entrepreneurs

• homogenization

• specialization

If a business creates new jobs, what kind of resource are they investing in?

• Capital Goods

• Financial Resources

• Human Capital

• Natural Resources

Which type of economy allows for a high degree of individual freedom?

• Traditional

• Command

• Market

What makes the decision to make (or not make) certain products in a traditional economy?

• Custom

• Entrepreneurs

• Government

• Producers

European countries can be described as MOSTLY what type of economy?

• command

• communist

• market

• traditional

The European Union has positively affected the economies of Europe by

• refusing to allow countries to trade with each other

• allowing England to become the richest European country

• lowering or eliminating barriers that slow down trade between countries

• making taxes on imported goods higher and promoting economic independence