Microeconomics Ch 2 Quiz

Which of the following is a distinguishing feature of a command system?
A. private ownership of a capital
B.central planning
C. heavy reliance on markets
D.wide-spread dispersion of economic power

Which of the following is a distinguishing feature of a market system?
A. public ownership of a capital
B. central planning
C. wide-spread private ownership of capital
D. a circular flow of goods, resources, and money

Examples of command economies are:
A. the United States and Japan
B. Sweden and Norway
C. Mexico and Brazil
D. Cuba and North Korea

Of the following countries, which one best exhibits the characteristics of a market economy?
A. Canada
B. Cuba
C. North Korea
D. Venezuela

Economic systems differ according to which two main characteristics?
A. who owns the factors of production, and the methods used to coordinate economic activity
B. the technology used in production, and the quantity and quality of natural resources
C. how goods are produced, and who gets them
D. the political system in place, and the degree of scarcity facing the economy

Broadly defined, competition involves:
A. private property and freedom of expression
B. independently acting buyers and sellers and freedom to enter or leave markets
C. increasing opportunity costs and diminishing marginal utility
D. capital goods and division of labor

An increase in consumer desire for strawberries is most likely to:
A. increase the number of strawberry pickers needed by farmers
B. reduce the supply of strawberries
C. reduce the number of people willing to pick strawberries
D. reduce the need for strawberry pickers

Which of the following is not one of the three fundamental questions?
A. what prices will be charged for goods and services?
B. who will get the goods and services?
C. what goods and services will be produced?
D. what goods and services to produce?

"consumer sovereignty" means that:
A. buyers can dictate the prices at which goods and services will be purchased
B. advertising is ineffective because consumers already know what they want
C. buyers control the quality of goods and services through regulatory agencies
D. buyers determine what will be produced based on their "dollar votes" for the goods and services offered by sellers

Which of the following best describes the invisible-hand concept?
A. the desire of resource suppliers and producers to further their own self-interest will automatically further the public interest
B. the non-substitutability of resources creates a conflict and calls for government intervention
C. the market system is the best system for overcoming the scarce resources problem
D. central direction by the government will improve resource allocation in a capitalistic economy