Topic 2 &3

Which economic goal does this exchange at an outdoor food stand BEST represent?

• economic security
• economic freedom
• economic stability
• economic equity

What does this diagram imply about the value of technological innovations?

• Innovations in education decrease unemployment
• Innovations in technology increase economic growth.
• Innovations in land use increase the need for mechanical equipment.
• Innovations in agriculture eliminate the need for hand tools.

Which of the following is a function of households in the market economy?

• They supply firms with goods and services.
• They supply firms with the factors of production.
• They send money to firms through the factor market.
• They send land, labor, and capital to firms through the product market.

What two qualities that work together to regulate the marketplace are present in this photo of two cellphone service providers?

• efficiency and underutilization
• opportunity and efficiency
• competition and self-interest
• innovation and specialization

What are two things that a command economy fails to provide consumers?

• incentives and income
• equity and consumer choice
• jobs and private property
• variety of goods and responsive prices

How do socialism and communism differ when it comes to government systems?

• Socialism can be democratic, while communism is authoritarian.
• Socialism allows private property, while communism outlaws it.
• Socialism has centralized planning, while communism relies on market forces.
• Socialism is authoritarian, while communism can be democratic.

According to this diagram, in what way does the government behave like a household in a mixed economy?

• It sells land, labor, and capital to firms.
• It pays taxes to firms.
• It purchases goods and services from firms.
• It transfers money to both households and firms.

What is one way in which the economy of North Korea differs from the economy of Mexico?

• North Korea’s government is less involved in the economy than Mexico’s government is.
• Mexico’s economy is far more reliant on central planning than North Korea’s economy is.
• Mexico’s government is less involved in the economy than North Korea’s government is.
• North Korea’s economy is far more reliant on free markets than Mexico’s economy is.

Which of the following BEST describes the U.S. free enterprise system?

• government provision of free services to those in need
• very heavy government regulation of businesses
• individual or corporate ownership of capital goods
• free trade, with markets open without restriction to foreign goods

Consider this diagram, which is comparing two different systems of production. Which of the following is MOST LIKELY depicted in the top half of this diagram?

• free market economy
• mixed economy
• traditional economy
• centrally planned economy