WorksheetsEconomics Chapter 2 Review
Total questions: 37
Worksheet time: 32mins
Market failures occur when
the accumulation of wealth in the free market is shared between a large group of people
a command economy increases production
the economy has a strong GDP and low interest rates
the distribution of goods and services in the free market is not efficient and leads to loss of social wellbeing
A situation of market failure is said to exist if;
buyers and sellers pay for the true opportunity costs of their actions
there are no externalities
the government provides merit goods free
third parties in society are affected and not compensated
When social costs are greater than private costs, there is a;
positive externality
negative externality
less than socially optimal output
socially optimal output
Which of the following industries is an example of a monopoly?
utilities/water
department stores
auto industry
commercial airlines
Negative externalities can be best described as
When the consumption/production of a good or service has a negative impact on a third party
When the consumption/production of a good or service has any impact on a third party
When the consumption/production of a good or service has a positive impact on a third party
When the consumption/production of a good or service depletes the access for a third party
Which market structure did John D. Rockefeller's Oil industry fall under?
Monopoly
Oligopoly
Perfect Competition
Monopolistic Competition
When you reach around the age of 62, you are now eligible for this monthly payment. People who disabled or cannot work are also eligible for this one.
Social Security
Property tax
Estate tax
Social Media
Pollution taxes aim to
make the polluter pay for the external costs of producing the good.
ensure the polluter pays the private costs of producing the good.
eliminate pollution.
The existence of externalities
is something we just have to live with in a market economy.
is a justification or rationale for government intervention in the market economy.
proves that markets are efficient.
contradicts the laws of demand and supply
A ____ economy is an economic system in which people, families, clans, or tribes produce and distribute goods according to customs.
command
market
traditional
A ____ economy is an economic system in which the government plans and makes all economic decisions.
traditional
market
command
A ____ economy is an economic system in which individual choice and voluntary exchange without government regulations direct economic decisions.
traditional
market
command
A centrally-planned economy is an example of a ____ economy.
command
market
traditional
Socialism and communism are examples of _____ economies.
command
market
traditional
The Communist Manifesto was written in 1848 by Friedrich Engels and ______.
Vladimir Lenin
Fidel Castro
Joseph Stalin
Karl Marx
____ is an economic system in which the government owns some of the industries (centrally planned) and other industries are privately owned.
capitalism
socialism
communism
In a _____ economic system, the government owns ALL of the factors of production.
communism
capitalism
socialism
_____ is an economic system based on private ownership of factors of production.
capitalism
socialism
communism
Laissez-faire is a French term loosely meaning "leave things alone" that means the government should ______.
not interfere in the economy at all
regulate the economy when needed
strictly regulate the economy
be lazy at the fair
Capitalism and market economies are characterized by the concept of _______, which means fair prices naturally set themselves due to multiple people/businesses producing the same product/service.
profit
competition
exchange
Capitalism and market economies are also characterized by ____, which is the financial gain that a seller makes from a business transcation.
taxes
competition
profit
exchange
An advantage of the market economy is that it ______.
provides more economic freedom and choice as well as profit as an incentive
provides essential public goods such as healthcare and national defense
spreads economic wealth relatively equally
Most economies in the world today are a _______ economy.
capitalist
communist
mixed
free market
