Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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The method used by a society to produce and distribute goods and services is
called
a. | a safety net. | c. | a command economy. | b. | a traditional economy. | d. | an economic
system. |
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2.
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The income people receive for supplying factors of production such as land,
labor or
capital is called
a. | an incentive. | c. | factor payments. | b. | consumer sovereignty. | d. | profit. |
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3.
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The passion that inspires a person to serve his or her country is called
a. | imperialism | b. | patriotism. | c. | mercantilism. | d. | capitalism. |
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4.
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Government programs that protect people experiencing unfavorable economic
conditions
is called
a. | a safety net. | c. | a command economy. | b. | an economic system. | d. | a market
economy. |
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5.
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The level of economic prosperity is called
a. | wealth. | c. | poverty. | b. | a standard of living. | d. | safety net. |
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6.
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An economic system that relies on habit custom, or ritual to decide questions of
production and consumption of goods and services is called a
a. | traditional economy. | c. | market economy. | b. | command economy | d. | centrally planned
economy. |
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7.
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An economic system in which decisions on production and consumption of goods and
services are based on voluntary exchange in markets is called a
a. | traditional economy. | c. | market economy. | b. | command economy. | d. | centrally planned
economy. |
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8.
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An economic system in which the central government makes all decisions on the
production and consumption of goods and services is called a(n)
a. | market economy | c. | utopian economy. | b. | traditional economy | d. | centrally planned
economy. |
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9.
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An economic system in which a central authority is in command of the economy is
called a(n)
a. | command economy. | c. | utopian economy. | b. | market economy. | d. | traditional
economy. |
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10.
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A market-based economic system with limited government involvement is called
a
a. | command economy. | c. | traditional. | b. | mixed economy. | d. | market economy. |
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11.
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An arrangement that allows buyers and sellers to exchange things is called
a(n)
a. | firm. | b. | intersection. | c. | market. | d. | household. |
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12.
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The concentration of the productive efforts of individuals and firms on a
limited number of activities is called
a. | factor market. | b. | incentive. | c. | generalization. | d. | specialization. |
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13.
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A person or group of people living in the same residence is called a
a. | firm. | b. | collective. | c. | kibbutz. | d. | household. |
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14.
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An organization that uses resources to produce a product which then sells is
called a
a. | firm. | b. | household. | c. | collective. | d. | kibbutz. |
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15.
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Market in which firms purchase the factors of production from households is
called the
a. | product market. | c. | supermarket. | b. | factor market. | d. | mall. |
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16.
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The financial gain made in a transaction is called
a. | cost. | b. | price. | c. | profit. | d. | loss. |
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17.
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The market in which households purchase the goods and services that firms
produce
is called the
a. | factor market. | c. | supermarket. | b. | product market. | d. | mall. |
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18.
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An expectation that encourages people to behave in a certain ways is called
a. | self-interest. | c. | an incentive. | b. | profit. | d. | cost. |
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19.
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The struggle among producers for the dollars of consumers is called.
a. | profit. | c. | incentive. | b. | consumer sovereignty. | d. | competition. |
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20.
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Term economists use to describe the self-regulating nature of the marketplace
is
a. | incentive. | c. | dark matter. | b. | consumer sovereignty. | d. | the invisible
hand. |
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21.
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The power of consumers to decide what gets produced is called
a. | authoritarianism. | c. | an incentive. | b. | consumer sovereignty. | d. | the invisible
hand. |
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22.
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A social and political philosophy based on the belief that democratic means
should be used to evenly distribute wealth throughout a society is called
a. | socialism. | b. | communism. | c. | authoritarian. | d. | capitalism. |
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23.
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A political system characterized by a centrally planned economy with all
economic and political power resting in the hands of the central government is called
a. | socialism. | b. | communism. | c. | authoritarian. | d. | capitalism. |
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24.
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_________________ is the doctrine that states that government generally should
not intervene in the marketplace.
a. | Carpe diem | c. | Ceteris paribus | b. | Caveat
emptor | d. | Laissez-faire |
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25.
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Property owned by individuals or companies, not by the government or the people
as a whole is called
a. | private property | c. | the public domain. | b. | public property. | d. | a public park. |
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26.
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An economic system characterized by private or corporate ownership of capital
goods; investments that are determined by private decision rather than by state control; and
determined in a free market is called
a. | communism. | c. | a centrally planned economy. | b. | socialism. | d. | free enterprise |
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27.
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Selling state-run firms to individuals is called
a. | privatization. | b. | nationalization. | c. | free enterprise | d. | a
continuum. |
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28.
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Why does even a free market economy need some government intervention?
a. | to provide for things that the marketplace does not address | b. | to ensure that the
government has the freedom to tax as necessary | c. | to make sure that the government can fulfill
its needs for military personnel | d. | so that the government has some control over
factor resources |
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29.
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Which of the following is NOT a key economic question?
a. | What goods and services should be produced? | b. | How should these
goods and services be produced? | c. | Who consumes these goods and
services? | d. | How should it be ensured that goods and services are paid
for? |
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30.
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What does the process of specialization do for an economy?
a. | It eliminates unemployment. | c. | It fosters
competition. | b. | It makes it more efficient. | d. | It makes it easier to control. |
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31.
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What is one of the most important advantages of a free market?
a. | It can change rapidly. | c. | It is easy to regulate. | b. | It protects the less
fortunate. | d. | It encourages
growth. |
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32.
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What incentive motivates a manufacturer to sell a product?
a. | making profits on sales | c. | pleasing the
consumer | b. | putting others out of business | d. | popularity of the
product |
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33.
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Which of the following was a free market philosopher?
a. | Karl Marx | c. | Vladimir Lenin | b. | Adam Smith | d. | Friedrich
Engles |
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34.
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Which of the following is characteristic of a traditional economy?
a. | Communities tend to be fast-growing. | b. | They are usually based on light industrial
production. | c. | They have a high standard of living. | d. | Children tend to have the same jobs as their
parents did. |
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35.
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What is the product market?
a. | the market in which payments are received for selling products to
consumers | b. | the market in which income is received for supplying land, labor, or
capital | c. | the market in which firms purchase the factors of production from
households | d. | the market in which households purchase the goods and services that firms
produce |
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36.
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Which of the following is a condition that most people would NOT expect the
safety net of the government to provide for?
a. | injuries | c. | natural disasters | b. | joblessness | d. | low income |
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37.
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How would the economy of Canada be likely to be characterized?
a. | free market | b. | centrally planned | c. | mixed, but on the
side of centrally planned | d. | mixed, but on the side of free
market |
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38.
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Which of the following was a free market philosopher who was associated with
limited government, laissez-faire, the invisible hand and is also known as the “Father
of Economics”?
a. | Karl Marx | c. | Vladimir Lenin | b. | Adam Smith | d. | Friedrich
Engles |
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Matching
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Identifying Key Terms
Match each term with the correct
statement below. a. | standard of living | f. | communism | b. | privatize | g. | laissez faire | c. | economic system | h. | collective | d. | self-interest | i. | product market | e. | safety net | j. | factor payments |
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39.
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the method used by society to produce and distribute goods and services
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40.
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the income people receive for supplying such things as land, labor, or
capital
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41.
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a situation in which households purchase the goods and services that firms
produce
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42.
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to sell a state-run firm to individuals
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43.
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the doctrine that government generally should not intervene in the
marketplace
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44.
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level of economic prosperity
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