Business in a world economy

Every economic system answers three questions. What is produced? How is it produced?

• For whom is it produced?

• Why is it being produced?

• Should it be produced at all?

• How easily can it be produced?

An economic system is a society's system of production, distribution and consumption of_______________.

• Natural resources

• Goods and services

• Stocks and bonds

• Factors of production

Who owns factors of production in a command economy?

• Private citizens

• Religious institutions

• The government

• All of the above

Which of the following is not a characteristic of a market economy?

• Profit is the motivation for most businesses

• Supply and demand dictate price and production

• Competition between businesses is discouraged

• None of the above

In theory which type of economic system should not experience market fluctuations.

• Command economy

• Mixed economy

• Market economy

• All of the above

In this type of economy, the people decide the supply, demand, and price.

• Market

• Traditional

• Command

• Mixed

This means that the government should not interfere in the marketplace.

• Laissez Faire

• Capitalism

• Communism

• Socialism

Privatization refers to_________________.

• Transfer of assets from people to government

• Transfer of assets from public to private organizations

• Transfer of assets from corporate to public

• Transfer of assets from corporate to government

Which of these is NOT a characteristic of a monopolistically competitive firm?

• There are many sellers

• Firms sell differentiated products

• There is free entry and exit

• Prices are set by the buyer

Monopoly has two key features, which are_____________.

• barriers to entry and no close substitutes.

• franchises and barriers to entry.

• barriers to entry and close substitutes.

• close substitutes and no barriers to entry.