Topic 2 Quiz

Define market.

• A place where goods are produced

• A system where goods and services are exchanged

• A location for storing goods

• A method of controlling prices

Define specialization.

• The ability to produce all goods

• Focusing on a limited range of goods or services

• The process of trading goods

• The act of consuming goods

In a free market system, who owns the factors of production?

• The government

• Private individuals and firms

• International organizations

• Local communities

What do households own in a free market economy?

• The government

• The factors of production

• The market regulations

• The trade routes

What do firms do with the factors of production?

• Consume them

• Trade them

• Use them to produce goods and services

• Store them

What is an example of a factor market?

• A grocery store

• A labor market

• A car dealership

• A clothing store

What is an example of a product market?

• A stock exchange

• A grocery store

• A job fair

• A real estate office

What is an example of an incentive for firms?

• Tax breaks

• Increased competition

• Higher production costs

• Reduced market share

What are examples of ways the United States is a mixed economy?

• Government owns all major industries

• Economy runs entirely on supply and demand

• Government provides social security and allows private businesses

• Government sets prices and production

Mixed economies are more necessary today for all of the following reasons EXCEPT (which answer is NOT a reason):

• Government has to address some needs that markets would not meet, like public roads

• Government attempts to provide more equality of opportunity, like with public schools

• Government protects private property, like with copyright law

• Government has to dictate the production of certain goods or services, like the automotive industry