Question 1

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 2

Most real world economies are mixed economies.

Accepted Answer

A) True 
 B)False

Question 3

What is the difference between socialism and communism? What are some examples of countries that are largely socialistic and some that are communistic?

Accepted Answer

Communism is a socialist economic system

Question 4

In a market economy:

Accepted Answer

A)  collective decision-making is more important than individual decision-making. 
B)  goods and services are distributed as if by an "invisible hand" to those who can not afford them. 
C)  profit provides an incentive to be productive. 
D)  the distribution of wealth is equitably distributed. 
A)  collective decision-making is more important than individual decision-making. 
B)  goods and services are distributed as if by an "invisible hand" to those who can not afford them. 
C)  profit provides an incentive to be productive. 
D)  the distribution of wealth is equitably distributed.

Question 5

Describe the differences between capitalism and socialism.

Accepted Answer

Capitalism is characterized by private o

Question 6

The economic system that answers the What,How and For Whom questions using prices is a:

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 7

Karl Marx was a(n):

Accepted Answer

A)  19th century German philosopher. 
B)  18th century Russian economist. 
C)  14th century Polish banker. 
D)  19th century Russian journalist. 
A)  19th century German philosopher. 
B)  18th century Russian economist. 
C)  14th century Polish banker. 
D)  19th century Russian journalist.

Question 8

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 9

The economic system characterized by private ownership of resources and market is:

Accepted Answer

A)  capitalism. 
B)  communism. 
C)  fascism. 
D)  socialism. 
A)  capitalism. 
B)  communism. 
C)  fascism. 
D)  socialism.

Question 10

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 11

The father of modern economics that wrote The Wealth of Nations is:

Accepted Answer

A)  Karl Marx 
B)  John Maynard Keynes 
C)  Adam Smith 
D)  Thorstein Veblen 
A)  Karl Marx 
B)  John Maynard Keynes 
C)  Adam Smith 
D)  Thorstein Veblen

Question 12

Most of the world's economies are mixed economies because ____.

Accepted Answer

A)  a cartel of powerful transnational firms demands it. 
B)  the market system of allocation is always best. 
C)  the command system of allocation is always best. 
D)  government intervention in an overall market system exists because markets fail when there is market power, a great deal of inequality, pollution externalities, or public goods. 
A)  a cartel of powerful transnational firms demands it. 
B)  the market system of allocation is always best. 
C)  the command system of allocation is always best. 
D)  government intervention in an overall market system exists because markets fail when there is market power, a great deal of inequality, pollution externalities, or public goods.

Question 13

Which of the following is a basic question by an economic system?

Accepted Answer

A)  for whom goods and services are produced. 
B)  how goods and services are produced. 
C)  what goods and services are produced. 
D)  all of the above. 
A)  for whom goods and services are produced. 
B)  how goods and services are produced. 
C)  what goods and services are produced. 
D)  all of the above.

Question 14

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 15

A mixed economy cannot exist without a politically free society.

Accepted Answer

A) True 
 B)False

Question 16

Karl Marx's massive work,titled Das Kapital,was published in 1848.

Accepted Answer

A) True 
 B)False

Question 17

Karl Marx predicted that the exploitation of workers would cause capitalism to self-destruct.

Accepted Answer

A) True 
 B)False

Question 18

Adam Smith,in his book,The Wealth of Nations,advocated:

Accepted Answer

A)  socialism. 
B)  an economy guided by an "invisible hand." 
C)  government control of the "invisible hand." 
D)  the adoption of mercantilism. 
A)  socialism. 
B)  an economy guided by an "invisible hand." 
C)  government control of the "invisible hand." 
D)  the adoption of mercantilism.

Question 19

According to Adam Smith,what is the primary source of a nation's wealth?

Accepted Answer

A)  The amount of gold and silver in the government's possession. 
B)  A spirit of cooperation in which people share according to their means. 
C)  Strong central planning authorities. 
D)  The people's ability to produce products and trade in free markets. 
A)  The amount of gold and silver in the government's possession. 
B)  A spirit of cooperation in which people share according to their means. 
C)  Strong central planning authorities. 
D)  The people's ability to produce products and trade in free markets.

Question 20

Centralized planning agencies are a key feature of command economies.

Accepted Answer

A) True 
 B)False

Exam 22: Economies in Transition

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

Most real world economies are mixed economies.

What is the difference between socialism and communism? What are some examples of countries that are largely socialistic and some that are communistic?

In a market economy:

Describe the differences between capitalism and socialism.

The economic system that answers the What,How and For Whom questions using prices is a:

Karl Marx was a(n):

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

The economic system characterized by private ownership of resources and market is:

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

The father of modern economics that wrote The Wealth of Nations is:

Most of the world's economies are mixed economies because ____.

Which of the following is a basic question by an economic system?

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

A mixed economy cannot exist without a politically free society.

Karl Marx's massive work,titled Das Kapital,was published in 1848.

Karl Marx predicted that the exploitation of workers would cause capitalism to self-destruct.

Adam Smith,in his book,The Wealth of Nations,advocated:

According to Adam Smith,what is the primary source of a nation's wealth?

Centralized planning agencies are a key feature of command economies.

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Growth and the Less-Developed Countries

Filters