Chapter 2 Quiz

What are the three fundamental economic questions every society must answer?

• What is the capital of the country?, How many people live there?, & What is the main language?

• What should be produced?, How should it be produced?, & For whom will it be produced?

• Who will govern the country?, What laws will be enacted?, & How will taxes be collected?

• What is the climate like?, How much rainfall is there?, & What are the natural resources?

What is an economic system?

• A method to control the weather

• A way to organize a country's political structure

• The way a society uses its scarce resources to satisfy people's unlimited wants

• A system to manage a country's military

Which of the following is NOT one of the economic systems mentioned?

• Traditional economy

• Command economy

• Market economy

• Socialist economy

What is a traditional economy?

• An economic system where decisions are based on customs and beliefs.

• An economic system where decisions are made by a central authority.

• An economic system based on technological advancements.

• An economic system driven by market forces.

Which of the following is an example of a traditional economy?

• Tribal societies where men hunt and women tend crops.

• A modern city with advanced technology.

• A country with a strong central government.

• A community with a free market system.

In a command economy, who decides what goods and services will be produced?

• The government

• Private companies

• Consumers

• International organizations

Which of the following is a characteristic of a command economy?

• Consumer preferences drive production

• Government owns the means of production

• Free market competition

• Private ownership of resources

Which of the following countries is an example of a command economy?

• United States

• Germany

• North Korea

• Japan

What is the basis of a market economy?

• Government directives

• Individual choice

• Central planning

• Collective decision-making

Who drives the economy in a market economy?

• The government

• Consumers and producers

• International organizations

• Large corporations