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WorksheetsComparative Economic Systems (focus: Capitalism)
Total questions: 40
Worksheet time: 1hrs 20mins
This form of economic arrangement existed in America during our colonial period (when Britain had charge/control over the 13 colonies).
socialism
mercantilism
capitalism
laissez-faire
A populist economic and political system based on collective, common, or public (i.e., government) ownership of [most] of the means of production.
capitalism
communism
socialism
A political and economic ideology that advocates for a classless system in which the means of production are owned communally, and private property is nonexistent (or severely curtailed).
capitalism
socialism
communism
An economic system characterized by private ownership in which the free market alone controls the production of goods and services.
socialism
communism
capitalism
Adam Smith's The Wealth of Nations advocates ... which of the following?
it's not the accumulation of gold and silver that makes as nation wealthy but it is rather the economic prosperity of its people
it's the accumulation of gold and silver that makes a nation wealthy, as it gives a government the ability to create new jobs
it's the purpose of government to use the wealth gained through trade with other countries that allows everyone to prosper economically
it's the purpose of government to control various aspects of the economy (i.e., the means of production), as doing so benefits most people
Adam Smith's The Wealth of Nations focused on the economic power of the _____________ over that of the ___________.
individual / government
government / individual
Adam Smith's The Wealth of Nations advocated a "hands-off" approach by the government (re: the economy) - known as ________________.
bonne-apres
laissez-faire
je-suis
s'il vous plait
In Adam Smith's The Wealth of Nations, he's essentially telling European monarchs to leave their subjects alone, and allow them to seek their own profit.
True
False
The economic philosophy advocated by Adam Smith in his book, The Wealth of Nations.
limited government
unlimited government
Each of the following is a factor of production in a capitalist economic system EXCEPT?
business
land
labor
capital
What is it about LAND (as a factor of production) that's germane to our discussion on capitalism?
it's privately owned - to do with what one will
it's regulated by government policy
it's shared between the individual and government
it's used by government in provision of goods and services
What is it about LABOR (as a factor of production) that's germane to our discussion on capitalism?
America's historically had the most productive labor force [in the world] - as related to government social welfare programs
America's historically had the most productive labor force [in the world] - as related to the law of sowing and reaping
America's historically had the most productive labor force [in the world] - as related to protecting workers via higher wages
America's historically had the most productive labor force [in the world] - as related to government using its wealth to create needed employment opportunities
What is it about CAPITAL (as a factor of production) that's germane to our discussion on capitalism?
capital is needed (& used) for private investment - which allows businesses to both expand and prosper
capital is needed (& used) by the government for investment - which allows businesses to both expand and prosper
capital is used by private businesses to pay all of their basic expenses (rent, utilities, etc.) - thus allowing an owner to focus on making a profit
capital is used by the government to get businesses started (open) - thus allowing the owners to more easily earn a profit
We discussed each of the following as related to the ROLE OF THE ENTREPRENEUR (as a factor of production) - EXCEPT?
know how to create a product or service that people want/demand
know how (& where) to manufacture your product
know how to market your product
know how to have more supply [of your product] than demand
Capitalism is also known as ... ?
free enterprise
free mercantile
mixed market
mixed service
Capitalism is a ___________ economic system.
centralized
decentralized
A 2016 Harvard University poll (among millennials) found that a majority of them
consider capitalism the best economic system, albeit with it's many flaws.
reject capitalism as the best economic system - preferring instead a more socialism.
consider capitalism the best economic system, but rail against the "hoarding" of wealth among the elite.
reject capitalism as the best economic system - preferring instead 100% government control over all the means of production.
A 2016 Harvard University poll reported that 44% of millennials would prefer to live in a socialist country.
True
False
Why is COMPETITION so important in a capitalist economic system?
keeps prices lower and quality higher
provides easier access to products and efficiency in production
allows for more profit and less loss
maintains a balance between supply and demand
SCENARIO: Vivi , Tiana, and Mya open up a tie-dye t-shirt shop in Huntington Beach, CA, where they plan to sell their own uniquely designed line of clothing. Their very first week of operation is quite productive, as they bring in $3,000 in sales! Their operating costs include the following: $400 for employee salaries, $800 for utilities, and $1,500 for rent (of the property). How much profit have they made on week 1?
$3,000
$1,500
$300
$100
What percentage of small business [in America] fail every year - on average?
15%
40%
60%
85%
Which of the following accurately explains [part of] the law of demand?
the higher the price, the lower the demand
the higher the price, the higher the quantity supplied
the lower the price, the lower the quantity supplied
the lower the price, the lower the demand
The U.S. economy is centrally planned (i.e., centralized planning).
True
False
Monopolies are bad/dangerous in a capitalist economy because
they keep prices artificially low, and supply can't keep up with demand.
they can keep prices artificially high, which causes inflation - a prime enemy of a free market system.
they purposely limit supply of their product - hence, causing deflation - a prime enemy of a free market system.
they keep prices artificially high, which causes demand to exceed available supply.
The U.S. economy is mostly decentralized (i.e., decentralized planning), which means that
most of the economic decisions made are by individuals, and not the government.
most of the economic decisions made are by the government, and not individuals.
most of the economic decisions made are by individuals, but with significant government interference.
The Sherman Antitrust Act of 1890
provided strict regulations on monopolists; they could continue controlling an industry, but had to do so the government's way.
outlawed monopolies/trusts, as their influence in the economy prevented any type of robust competition.
allowed men like John D. Rockefeller to control his particular industry (oil), but prevented any future combinations going forward.
forced monopolists to charge a fair price for their product (e.g., Andrew Carnegie's steel).
Does competition (in a free market economy) always keep prices lower?
Yes
No
Price is dependent on (in many cases) what consumers are willing to pay.
True
False
Most Americans (55%) think the rich get richer and the poor get poorer - a "failing" of capitalism, but that is NOT always true.
Correct
Incorrect
Capitalism essentially gives people two distinct choices -
to either make a lot of money or only a little bit of money.
to either succeed (making enough money) or fail (= to being poor).
to either have a good paying job or a poor paying job.
to either receive enough government assistance or have to pay your way entirely on your own.
Some members of Congress believe that corporations have "taken over" the U.S. economy - hence, a "failing" of the free market system.
True
False
Which of the following words best summarizes the realities surrounding an entrepreneur? Hint: Think through what we've discussed about the chances of "making it" in the business world.
risk
adventure
ownership
initiative
Which of these 4 economic systems is currently employed in the country of Venezuela? Hint: "clap, clap, clap"
capitalism
socialism
communism
mercantilism
Why are Venezuelans facing massive food shortages (along with crippling inflation)?
the government is in charge of food distribution, and unable to properly manage such
there's very little arable farmland in this country - hence, the inability to grow enough food for their own needs
the government lacks the needed funds for buying extra food from other countries
the people refuse to share the government's plan of equally sharing available food resources
America has the most productive labor force in the world.
True
False
Why does communist China have the world's fastest growing economy? (Is communism working ...?)
because they've adopted a mostly capitalist economic system, which allows for individual initiative
because they've convinced their people that total government control over the economy works best
because they pay their workforce much higher wages (then in other countries like Cuba)
Which of the following age groups is MOST dissatisfied with capitalism?
18-29
30-43
44-55
56-70
Definition: elastic demand.
if the price goes up, we buy less (because it's not something we need to survive)
if the price goes up, we buy the same amount (because it's something we need to survive)
Definition: inelastic demand.
if the price goes up, we buy less (because it's not something we need to survive)
if the price goes up, we buy the same amount (because it's something we need to survive)
Which of the following products has an inelastic demand (for all Americans)?
water
milk
bread
a car
