1. The ability to make our own economic decisions without interference from the government is called
A. economic equity.
B. economic freedom.
C. economic growth.
D. economic stability.
2. Which economic goals are emphasized in a command economy?
A. economic security and equity
B. economic efficiency and freedom
C. economic stability and growth
D. economic stability and security
3. Which economic goals are emphasized in a market economy?
A. economic security and equity
B. economic efficiency and freedom
C. economic stability and growth
D. economic stability and security
4. What is the role of government in a mixed economy?
A. to establish the institutions that enable markets to operate
B. to regulate the market when it operates in ways that society finds unacceptable
C. to provide public benefits that are too expensive for individuals or small groups to provide
D. all of the above
5. Which statement about a mixed economy is true?
A. Firms supply taxes and products to households.
B. Household supply taxes and labor to firms.
C. The government pays household and firms for their labor and products.
D. The government plays no role in a mixed economy.
6. Individuals own the factors of production and make decisions about how to use those factors in
A. a command economy.
B. a communist society.
C. a free enterprise system.
D. an unfree mixed economy.
7. A society that values economic equity seeks to
A. provide its poorer members with food, shelter, and health care to live decently.
B. ensure that the good and services we rely on are always there.
C. provide a job to everyone who seeks one.
D. give everyone a fair share of the economic pie.
8. Which of these economic goals is most important in a traditional economy?
A. growth
B. stability
C. freedom
D. efficiency
9. In the circular flow model, which of these is a factor payment?
A. the monthly mortgage on a house
B. the hourly wage a store pays to a clerk
C. the check someone writes to buy groceries
D. the credit card charge for ordering games online
10. Which kind of economy is most common today?
A. command
B. market
C. mixed
D. traditional
11. Why did the Soviet Union experience many surpluses and shortfalls?
A. The labor force was not well educated.
B. The cold Russian climate made farming hard.
C. Central planners could not manage every detail.
D. The country depended on imports to obtain resources.
12. Which of the following is true in a mixed economy?
A. There are often shortages of many goods.
B. Businesses are free to make many choices, but they face some government regulation.
C. Businesses are free to do whatever they want, and they face no government regulation.
D. The government makes all economic decisions for businesses.
13. Which of the following is true in a command economy?
Business owners decide which goods to produce.
The government makes no economic decisions.
Consumers have many choices.
The government decides which goods are produced.
14. What is the difference between a free market economy and a mixed economy?
A. In a market economy, consumers have fewer choices of products to buy.
B. In a market economy, the government controls prices.
C. In a mixed economy, there are no government regulations.
D. In a mixed economy, there are more government regulations.
15. When economies move from being centrally planned to a more mixed economy, they can sometimes experience problems. These problems are generally called problems of:
A. Transition
B. Factor Mobility
C. Privatization
D. Unemployment
16. What term is used to refer to an economic system in which the means of production are largely in private hands, and the main incentive for economic activity is the accumulation of profits?
A) capitalism
B) socialism
C) communism
D) laissez-faire
17. David works on an assembly line at Ford that puts together cars. He is responsible for screwing
the lug nuts on to the hub caps of the tires. David’s job is an example of ______.
a. a factor payment
b. competition
c. self-interest
d. specialization
18. Creating laws to protect property and enforce contracts is one role of ______.
a. a self-regulating free market
c. an economic system
b. the factor market
d. a government