Economics
Chapter 2 Review Assignment
Complete this on a separate sheet of paper
This is due on test day
1. What are two ways that households and firms interact in the factor market? How do they interact in the product market?
2. You are the owner of a new bakery that just opened up in town. Give three (specific) examples of ways that your business might interact with households.
3. What must happen for a nation’s standard of living to improve?
4. Identify the safety net programs in the United States economy. Why might some be opposed to these programs?
5. How does specialization lead to more efficiency in the economy?
6. How might the introduction of government into the circular flow (pg 31) model affect your business?
7. Summarize Adam Smith’s feelings and attitude toward government intervention in the marketplace.
8. Why do governments intervene in a mixed economy? Choose one of these reasons and explain whether or not you think Adam Smith would have approved.
9. What are the major economic goals that each economic system tries to meet?
10. Describe, in one sentence only, the economic system of the United States.
11. Summarize and explain Karl Marx’s main complaints against a capitalist economy.
12. How specifically would your life possibly change if the United States moved to a Socialist economy? What if it moved to a Communist economy? Would there be any difference between the two?
13. How does laissez faire differ from a centrally planned government? Could a pure laissez faire system work in your opinion? Why or why not?
14. Describe the economic situation of Hong Kong. How does it favor entrepreneurs and investors?