Chapter 2 Flashcards
What is the struggle among various producers for the consumers business called?
Completion
What is the function of an economic system?
To produce and distribute goods and services
What does the process of specialization do for an economy?
It makes it more efficient
Collectives in the Soviet Union were inefficient producers of agriculture products. Why?
Farm workers had guaranteed incomes, so they had few incentives to produce more or better crops.
Which of the following was a free market philosopher?
Ad smith
How could the Chinese economy be characterized
Mixed, but in the side of centrally planned
What is one of the most important advantages of a free market?
It encourages growth
Who was the leader that introduce communism and central planning to the former Soviet Union?
Vladimir Lenin
What might be a hardship for citizenship of centrally planed economy making a transition between market-based system?
Workers would loose job security and guaranteed incomes.
In which of the following lists of mixed economies does the market system dominate?
United States, United Kingdom, Singapore, Hong Kong
Why do markets exist?
Markets allow people to buy what they need to consume and sell the specialized goods and services they produce
Why does even a free market economy need some government intervention?
To provide for things that the marketplace does not address
In what kind of an economy does the government make all the decisions?
Centrally planned
Which of the following is characteristic of a traditional economy?
Children tend to have the same jobs as their parents did
What is the product market?
He market in which households purchase the goods and services that firms produce
You are an entrepreneur with an innovative idea for a new business. In which kind of economy would you have the most opportunity to try to achieve success?
Market economy
Suppose there is a family in which all the boys are expected to become farmers when they are adults, just as their fathers and grandfathers did. In which kind of economy do they participate?
Traditional economy
Which of the following does a government provide as part of a safety net for the people?
Unemployment compensation
The economy of china is in transition. What does this mean?
The economy is moving from central planning toward a market-based system.
Which of the following goals is difficult to achieve in a pure fee market system?
Economic equity
What incentive motivates a manufacturer to sell a product?
Making profits on sales
A person believes hat rail equality can only exist when political equality is couples with economic equality. This person believes that democratic means should be used I distribute wealth evenly throughout society. This person is a
Socialist
What incentive do manufacturers have to sell their products?
Making profits on sales
What is the purpose of completion?
To act as a regulating force in the marketplace
