Exam 2: Markets and Economies

When Eric is staring into the refrigerator trying to figure out what to make for dinner, which of the three economic questions is he attempting to answer?

There are 12 cookies to be distributed between two friends. Which of the following choices would allocate the cookies in the most efficient manner?

Jane is celebrating her barbershop's fifth anniversary by auctioning a free haircut to the highest bidder. Jane's auction is an example of what fundamental economic question?

In the circular flow model, households:

Which of the following is the role that is played by the government in the circular flow diagram?

The economist who developed the idea of efficiency in economics is:

What are the three questions that every economic system needs to answer? How are those answered in a market system?

Most economies in the world are:

In the circular flow diagram, what flows from firms to factor markets?

If an economy figures out how to allocate land, labor, and capital in such a way that no other allocation makes society better off, then the economy has answered what question?

If an entrepreneur wants the tightest control over the decision making in a firm, what is the best type of firm to operate?

The economy of Stockbridge has centralized decision making about what is produced and how it is allocated. Stockbridge most likely has a _____ economy.

A firm that is legally distinct from its owners, who are called shareholders, is called a:

In the circular flow model, a firm will:

Pizza is made using ovens, dough, sauce, cheese, electricity, and workers. For each of these, identify the category of the factors of production to which they belong.

When power plants switch from using coal as a fuel for electricity generation to using less expensive natural gas as a fuel, it demonstrates which of the economic questions?

Which of the following is a reward that a shareholder receives in payment for holding stock?

The ability to assemble all of the other factors of production into a good falls under the category of:

Capitalism is also known as a _____ economy.

The central objective that firms, households, and governments have when making economic decisions is: