Matching
|
|
|
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 |
|
|
|
1.
|
the method used by society to produce and distribute goods and services
|
|
|
2.
|
one’s own personal gain
|
|
|
3.
|
the income people receive for supplying such things as land, labor, or
capital
|
|
|
4.
|
a situation in which households purchase the goods and services that firms
produce
|
|
|
5.
|
to sell a state-run firm to individuals
|
|
|
6.
|
a large Soviet farm leased from the state to groups of peasant farmers
|
|
|
7.
|
the doctrine that government generally should not intervene in the
marketplace
|
|
|
8.
|
level of economic prosperity
|
Multiple Choice
Identify the
choice that best completes the statement or answers the question.
|
|
|
9.
|
Which of the following is NOT characteristic of a centrally planned
economy?
a. | The central government owns all land and capital. | b. | The central
government makes all economic decisions. | c. | Each collective or factory sets its own
goals. | d. | Each person is assigned a job. |
|
|
|
10.
|
What is the struggle among various producers for the consumer’s business
called?
a. | socialism | c. | incentive | b. | competition | d. | self-regulation |
|
|
|
11.
|
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 |
|
|
|
12.
|
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? |
|
|
|
13.
|
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. |
|
|
|
14.
|
How could the Chinese economy 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 |
|
|
|
15.
|
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. |
|
|
|
16.
|
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 |
|
|
|
17.
|
Which of the following was a free market philosopher?
a. | Karl Marx | c. | Vladimir Lenin | b. | Adam Smith | d. | Friedrich
Engels |
|
|
|
18.
|
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. |
|
Short Answer
|
|
|
Interpreting a Circular Flow Diagram
| Circular Flow
Diagram of a Market Economy | |
|
|
|
19.
|
What does the diagram as a whole represent?
|
|
|
20.
|
What does the upper half of the graph, marked “1,” represent?
|
|
|
21.
|
What does the lower line of monetary flow, marked “2,” show?
|
Essay
|
|
|
Critical Thinking
|
|
|
22.
|
Identifying Central Issues What are some of the advantages of a mixed
economy?
|
|
|
23.
|
Identifying Cause and Effect Explain what has happened to most of the
large centrally planned economies. Why has this has happened?
|
|
|
24.
|
Drawing Conclusions How does the government participate in a mixed
economy?
|