Question 1

A market system does not operate based on self-interest.

Accepted Answer

A) True 
 B)False

Question 2

The freedom of consumers to cast their dollar votes to buy, or not to buy, at prices determined in competitive markets describes:

Accepted Answer

A)  socialism. 
B)  communism. 
C)  consumer sovereignty. 
D)  the aspirations of Karl Marx. 
A)  socialism. 
B)  communism. 
C)  consumer sovereignty. 
D)  the aspirations of Karl Marx.

Question 3

An economic system that answers the What, How, and For Whom questions using prices determined by the interaction of the forces of supply and demand is a:

Accepted Answer

A)  market economy. 
B)  command economy. 
C)  traditional economy. 
D)  none of these. 
A)  market economy. 
B)  command economy. 
C)  traditional economy. 
D)  none of these.

Question 4

A classless society and economic system where all the factors of production are owned by workers and people share production according to their needs describes:

Accepted Answer

A)  capitalism. 
B)  communism. 
C)  the invisible hand. 
D)  a mixed economy. 
A)  capitalism. 
B)  communism. 
C)  the invisible hand. 
D)  a mixed economy.

Question 5

According to Adam Smith's invisible hand doctrine:

Accepted Answer

A)  self-interest best serves the interests of society. 
B)  laissez faire must be improved by government intervention. 
C)  producers should serve the best interests of society. 
D)  only laissez faire mercantilism best serves the interests of society. 
A)  self-interest best serves the interests of society. 
B)  laissez faire must be improved by government intervention. 
C)  producers should serve the best interests of society. 
D)  only laissez faire mercantilism best serves the interests of society.

Question 6

Adam Smith's book, The Wealth of Nations, was published at the time of the:

Accepted Answer

A)  War of 1812. 
B)  U.S. Declaration of Independence. 
C)  U.S. Civil War. 
D)  Great Depression. 
A)  War of 1812. 
B)  U.S. Declaration of Independence. 
C)  U.S. Civil War. 
D)  Great Depression.

Question 7

Adam Smith believed that a nation would produce the maximum wealth by relying on government to make public interest economic decisions.

Accepted Answer

A) True 
 B)False

Question 8

In the real world, most economic systems are:

Accepted Answer

A)  market economies. 
B)  command economies 
C)  mixed economies. 
D)  traditional economies. 
A)  market economies. 
B)  command economies 
C)  mixed economies. 
D)  traditional economies.

Question 9

Karl Marx published:

Accepted Answer

A)  Das Kapital. 
B)  General Theory of Communism. 
C)  The Wealth of Nations. 
D)  Capitalist Manifesto. 
A)  Das Kapital. 
B)  General Theory of Communism. 
C)  The Wealth of Nations. 
D)  Capitalist Manifesto.

Question 10

Most real world economies are mixed economies.

Accepted Answer

A) True 
 B)False

Question 11

The economic system that has the benefit of cooperation among individuals but suffers from a lack of individual initiative that leads to greater production describes the:

Accepted Answer

A)  market economy. 
B)  command economy 
C)  soviet economy. 
D)  traditional economy. 
A)  market economy. 
B)  command economy 
C)  soviet economy. 
D)  traditional economy.

Question 12

According to Adam Smith, the "invisible hand" refers to which of the following?

Accepted Answer

A)  The "best interests of society (public interest) will occur as an outcome of the market process coordinating the self-interested interactions of buyers and sellers (private interest). 
B)  Government interference is the invisible hand of inefficiency. 
C)  Bribes and graft is the invisible hand of inefficiency. 
D)  The "best interests of society" will occur as an outcome of careful guidance by government authorities in allocating scarce goods and services. 
A)  The "best interests of society (public interest) will occur as an outcome of the market process coordinating the self-interested interactions of buyers and sellers (private interest). 
B)  Government interference is the invisible hand of inefficiency. 
C)  Bribes and graft is the invisible hand of inefficiency. 
D)  The "best interests of society" will occur as an outcome of careful guidance by government authorities in allocating scarce goods and services.

Question 13

Which nation achieved the ideal communist society as described by Marx?

Accepted Answer

A)  Castro's Cuba. 
B)  Mao's China. 
C)  Stalin's Soviet Union. 
D)  No nation has achieved Marx's vision of communist society. 
A)  Castro's Cuba. 
B)  Mao's China. 
C)  Stalin's Soviet Union. 
D)  No nation has achieved Marx's vision of communist society.

Question 14

A traditional system operates based on the self interest of buyers and sellers.

Accepted Answer

A) True 
 B)False

Question 15

When the official price for goods and services is below the equilibrium price in a market, prices no longer perform their rationing function efficiently.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following represents key strengths of the market economy as a system of allocation?​

Accepted Answer

A)  ​Goods and services are allocated based on willingness and ability to pay,
Rather than based on need. 
B)  Producers have strong incentives to innovate because successful innovators
Are rewarded with higher profit. 
C)  Since price is freely set based on supply and demand, shortages and surpluses
Are minimized. 
D)  ​All of the answers above are correct. 
A)  ​Goods and services are allocated based on willingness and ability to pay,
Rather than based on need. 
B)  Producers have strong incentives to innovate because successful innovators
Are rewarded with higher profit. 
C)  Since price is freely set based on supply and demand, shortages and surpluses
Are minimized. 
D)  ​All of the answers above are correct.

Question 17

Adam Smith believed that the goal of economic activity is to amass wealth in the form of gold, and that this could best be accomplished through government carefully using tariffs and quotas to fashion favorable terms of trade with its trading partners.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true?

Accepted Answer

A)  The doctrine of laissez-faire advocates an economic system with extensive government intervention and little individual decision-making. 
B)  In capitalism income is distributed on the basis of need. 
C)  Adam Smith was the father of socialism. 
D)  Most real-world economies are mixed economic systems. 
E)  The "invisible hand" refers to government economic control. 
A)  The doctrine of laissez-faire advocates an economic system with extensive government intervention and little individual decision-making. 
B)  In capitalism income is distributed on the basis of need. 
C)  Adam Smith was the father of socialism. 
D)  Most real-world economies are mixed economic systems. 
E)  The "invisible hand" refers to government economic control.

Question 19

In traditional economies, people base economic decisions on the precedents established by previous generations.

Accepted Answer

A) True 
 B)False

Question 20

The economic system in which the basic economic questions are answered through markets with some government intervention is a:

Accepted Answer

A)  command economy. 
B)  mixed economy. 
C)  market economy. 
D)  planned economy. 
A)  command economy. 
B)  mixed economy. 
C)  market economy. 
D)  planned economy.

A market system does not operate based on self-interest.

The freedom of consumers to cast their dollar votes to buy, or not to buy, at prices determined in competitive markets describes:

An economic system that answers the What, How, and For Whom questions using prices determined by the interaction of the forces of supply and demand is a:

A classless society and economic system where all the factors of production are owned by workers and people share production according to their needs describes:

According to Adam Smith's invisible hand doctrine:

Adam Smith's book, The Wealth of Nations, was published at the time of the:

Adam Smith believed that a nation would produce the maximum wealth by relying on government to make public interest economic decisions.

In the real world, most economic systems are:

Karl Marx published:

Most real world economies are mixed economies.

The economic system that has the benefit of cooperation among individuals but suffers from a lack of individual initiative that leads to greater production describes the:

According to Adam Smith, the "invisible hand" refers to which of the following?

Which nation achieved the ideal communist society as described by Marx?

A traditional system operates based on the self interest of buyers and sellers.

When the official price for goods and services is below the equilibrium price in a market, prices no longer perform their rationing function efficiently.

Which of the following represents key strengths of the market economy as a system of allocation?

Adam Smith believed that the goal of economic activity is to amass wealth in the form of gold, and that this could best be accomplished through government carefully using tariffs and quotas to fashion favorable terms of trade with its trading partners.

Which of the following statements is true?

In traditional economies, people base economic decisions on the precedents established by previous generations.

The economic system in which the basic economic questions are answered through markets with some government intervention is a:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Growth and the

Filters

Exam 16: Economies in Transition

A market system does not operate based on self-interest.

The freedom of consumers to cast their dollar votes to buy, or not to buy, at prices determined in competitive markets describes:

An economic system that answers the What, How, and For Whom questions using prices determined by the interaction of the forces of supply and demand is a:

A classless society and economic system where all the factors of production are owned by workers and people share production according to their needs describes:

According to Adam Smith's invisible hand doctrine:

Adam Smith's book, The Wealth of Nations, was published at the time of the:

Adam Smith believed that a nation would produce the maximum wealth by relying on government to make public interest economic decisions.

In the real world, most economic systems are:

Karl Marx published:

Most real world economies are mixed economies.

The economic system that has the benefit of cooperation among individuals but suffers from a lack of individual initiative that leads to greater production describes the:

According to Adam Smith, the "invisible hand" refers to which of the following?

Which nation achieved the ideal communist society as described by Marx?

A traditional system operates based on the self interest of buyers and sellers.

When the official price for goods and services is below the equilibrium price in a market, prices no longer perform their rationing function efficiently.

Which of the following represents key strengths of the market economy as a system of allocation?​

Adam Smith believed that the goal of economic activity is to amass wealth in the form of gold, and that this could best be accomplished through government carefully using tariffs and quotas to fashion favorable terms of trade with its trading partners.

Which of the following statements is true?

In traditional economies, people base economic decisions on the precedents established by previous generations.

The economic system in which the basic economic questions are answered through markets with some government intervention is a:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Growth and the

Filters

Which of the following represents key strengths of the market economy as a system of allocation?