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Question 1

In a free market system, decisions about what and how much is produced are made by ___.

Answer 1

The market consisting of buyers and sellers

Question 2

Prices in a free market economy are determined by ____.

Answer 2

Supply and demand

Question 3

Perfect, monopolistic, oligopoly, and monopoly are four different degrees of _____.

Answer 3

Competition

Question 4

The supply concept refers to the relationship between the quantity of products produced price. If the market price of a product increases, quantity supplied will _____.

Answer 4

Increase

Question 5

What are three benefits of a free market economy?

Answer 5

1. The opportunity for people to work their way out of poverty
2. Competition that benefits consumers with better prices and services
3. Encouraging efficiency among competing businesses

Question 6

The quantity of products that people are willing to buy at different prices at a specific time is referred to as ____.

Answer 6

Demand

Question 7

Over time, as negotiation occurs between buyer’s demand products and seller’s supplying products, the ____ will be determined.

Answer 7

Market price

Question 8

In a free market, the prices of products exchanged in the market ____.

Answer 8

Are negotiated by buyers and sellers

Question 9

What are two ways that socialism affects businesses?

Answer 9

Because government owns many of the basic businesses such as utilities

Through higher levels of taxation

Question 10

What are four different degrees of competition within free markets?

Answer 10

Perfect competition
Monopolies
Oligopolies
Monopolistic competition

Question 11

A positive goal of ___ is social equality, while a negative outcome is taking income from citizens at extremely high rates.

Question 12

A benefit of free market is that it

Answer 12

Allows for open competition among companies

Question 13

What is the phenomenon known as brain drain?

Answer 13

When the best and brightest individuals in a country leave to work in other countries

Question 14

Mark, the marketing manager of a large u.s. corporation, realizes that Afghanistan has virtually no supply of tomatoes. He conducts a study to see what quantity of tomatoes Afghan customers would be able and willing to buy at different prices. Mark is analyzing Afghanistan’s____

Answer 14

Demand of tomatoes

Question 15

In an economic and political system called communism, ____.

Answer 15

The government owns almost all the factors of production

Question 16

In free markets the price of a product depends on how much the producers are willing and able to sell. What does the market price depend on in a free market?

Answer 16

Supply and demand

Question 17

What are two characteristics of mixed economies?

Answer 17

They contain elements of more than one system.

They exist when the distribution of resources involves elements from more than one economic system.

Question 18

The idea that some basic businesses such as steel mills, coal mines and utilities, should be owned and controlled by the government is indicative of a ___ economic system.

Answer 18

Socialist

Question 19

Socialism

Answer 19

Is an economic system based on the premise that some, if not most, basic businesses (e.g., steel mills, coal mines, and utilities) should be owned by the government so that profits can be evenly distributed among the people.

Question 20

A positive goal ___ is social equality, while a negative outcome is taking income from citizens at extremely high rates.

Answer 20

Socialism

Question 21

The loss of the best and brightest people to other countries is the:

Answer 21

Brain drain

Question 22

Hugo lives in a country where individuals own all or most of the factors of production. Clearly Hugo lives in a ___ country.

Answer 22

Capitalist

Question 23

What is the political and economic system in which the government makes almost all economic decisions and owns almost all the major factors of production, as well as choosing religion, where to live, and jobs for it’s citizens.

Answer 23

Communism

Question 24

When ___ determines what goods and services get produced, it is a free- market economy. When ___ determines what goods and services get produced, it is a command economy.

Answer 24

The market; the government

Question 25

What two ways that socialism affects businesses?

Answer 25

Because government owns many of the basic businesses such as utilities

Through higher levels of taxation

Question 26

What is the total value of final goods and services produced in a country in a given year called?

Answer 26

Gross domestic product

Question 27

Socialism has several negative outcomes such as:

Answer 27

A brain drain

Fewer incentives to work hard

Higher taxes

Question 28

Which economic system is based on free markets, in which the market largely determines what goods and services get produced, who gets them, and how economy grows?

Answer 28

Capitalism

Question 29

What is the unemployment rate?

Answer 29

The percentage of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks

Question 30

In an economic and political system called communism, ___.

Answer 30

The government owns almost all the factors of production