Power Flashcards
Dante is a young urban professional working for a tech startup in San Francisco. He receives a decent salary, but also receives generous health insurance, retirement, and family leave policies. We would say that Dante is part of the ____.
primary labor market
The economy is typically divided into three sectors. Often simply called the “manufacturing” sector, the ____ sector involves taking raw materials and transforming them into finished products.
secondary/industrial
Which of the following is NOT true about the social impacts of the Industrial Revolution?
Economic inequality fell sharply as more goods became available to consumers
The ____ is the social institution that organizes production, consumption, and trade of goods in a society.
economy
When economists refer to the “invisible hand,” they’re referring to Adam Smith’s argument that ____.
if left alone, consumers in a capitalist economy would regulate the market themselves by selecting goods and services they value
Capitalism is characterized by ____.
private ownership and open competition
Socialism is characterized by ____.
collective ownership of the means of production, with a emphasis on meeting everyone’s basic needs rather than generating wealth
Economists believe that at least some level of government regulation is necessary in capitalism in order to prevent market failures. (T/F)
true
The key development in the emergence of the modern economy was ____.
Industrial Revolution
The largest portion of the US economy today is the ____ sector.
tertiary/service
Which of the following is NOT one of the key questions decided by economic systems?
The level of taxes on goods and services
Individual households belong to the resource market because ____.
they sell their labor to businesses
Which of the following statements is NOT true about “mixed” market economies?
invisible hand of the market guarantees efficiency through competition.
In the “circular flow” economic model, ____
businesses sell goods and services to households and households sell their labor to businesses
Which of the following is NOT a way in which our government intervenes in the market economy?
Setting limits on total profits businesses are allowed to declare in any fiscal year.
An economy that combines capitalism with some areas of government control and regulation is called a(n) ____ economy.
mixed
An economy in which government strictly controls all aspects of production is called a(n) ____ economy
planned
The key distinguishing feature of different economic systems is ____.
who owns and controls the factors of production
Political economists agree that there are a number of ways in which governments structure markets. In the 1930s and 1940s, it wasn’t cost effective to provide electricity to many parts of rural America. During the New Deal, the government stepped in and built electric power through projects like the Tennessee Valley Authority (TVA). This illustrates which of the ways in which the US government structures the market economy?
providing public goods
Political economists agree that there are a number of ways in which governments structure markets. When a company hires an employee in the US, the boss can assume that the employee has some basic skills (reading, math, etc.) but also knows how to show up on time and follow directions. Companies don’t have to completely train their employees “from scratch.” This illustrates which of the ways in which the US government structures the market economy?
creating labor force
Political economists agree that there are a number of ways in which governments structure markets. The factory in town used to dump its waste into the river, but local residents began to complain about its effect on their health. The factory wasn’t going to spend more money on waste treatment if it didn’t have to, so the state government passed environmental regulations that made it illegal to dump industrial waste into the river. This illustrates which of the ways in which the US government structures the market economy?
Ameliorating externalities
Political economists agree that there are a number of ways in which governments structures markets. In a perfect free market, only the laws of supply and demand would determine what is sold on the market. But many US states and localities have “blue laws” that outlaw or restrict the sale of alcohol. This illustrates which of the ways in which the US government structures markets?
governing rules of exchange
Political economists agree that there are a number of ways in which governments structure markets. In the US, mergers between large companies need to be approved by the Department of Justice and the Federal Trade Commission. This illustrates which of the ways in which the US government structures the market economy?
promoting competition
Political economists agree that there are a number of ways in which governments structure markets. When you buy gasoline at the pump, you are confident that a gallon of gas at one gas station will be equal in volume to a gallon of gas at the gas station across town. This illustrates which of the ways in which the US government structures the market economy?
setting market standards