Chapter 2 Economics Test

Which of these statements describes a disadvantage of a traditional economy?

• New ways of doing things are discouraged

• Everyone knows his/her role

• New way of doing things is encouraged

• Difficult economic decisions are made by the state

Which of these economic systems have the LEAST in common?

• Market economy and capitalism

• command economy and socialism

• command economy and capitalism

• free enterprise economy and market economy

Which of these statements is descriptive of a market economy?

• Most media is state owned and operated

• the government determines what is produced and by whom

• major economic decisions are made for individuals, not by them

• major economic decisions are made by individuals, not for them

In which of these systems is the government MOST likely to provide people with goods and services they could not otherwise afford

• A market economy 

• A socialist economy

• A traditional economy

• A free enterprise economy

Which of these countries has an economy MOST similar to that of the former Soviet Union?

• Sweden

• Norway

• South Korea

• North Korea

Which of the following is a feature of a command economy that distinguishes it from a socialist economy?

• All production is managed by the government 

• All economic decisions are made by the free market

• All economic decisions are based on custom and habit

• Some degree of private ownership and activity is allowed

Which of the following lists economic systems in order from LEAST to MOST flexible?

• Command, Socialism, Free Market

• Free market, Socialism, Command

• Socialism, Command, Free Market

• Free market, Command, Socialism

Which of these is a major advantage of a market economy?

• It can change direction rapidly as needed when markets change

• There is a high degree of individual freedom

• There is efficient government control of productions and distribution

• People are likely to be offered goods and services they cannot afford

Which type of economy is most prevalent in the world today?

• Mixed

• Market

• Command

• Traditional

Which of the following explains why products made under a command economy are more likely to be low quality?

• The workers who make them have little incentive to make them well

• The workers who make them are not given quality control guidelines

• The workers who make them are left to manage production facilities on their own

• The workers who make them are forced by tradition to use old fashioned methods