Quiz 3

Question 1

was born in what is now Germany in 1818 and grew up in middle-class comfort

Answer 1

Marx

Question 2

would be exiled from his homeland for becoming involved in radical politics

Answer 2

Marx

Question 3

During his Travels, Marx, met the son of a factory worker

Answer 3

Friedrich Engels

Question 4

Marx concluded that the _____ had created a system of wage slavery

Answer 4

Industrial Revolution

Question 5

The whole industrial system, Marx reasoned, was based on

Answer 5

the exploitation of workers

Question 6

Marx assisted by Engels laid out ideas of worker overthrow in

Answer 6

the Communist Manifesto(1848)

Question 7

still has an economy with mostly command elements

Answer 7

North Korea

Question 8

Advantages of command economies

Answer 8

They seek to provide for everyone

Leaders in a command economy can use the nation’s resources to produce items that may not make money in a market economy

Question 9

Disadvantages of command economies

Answer 9

Central planners often have little understanding of local conditions
Workers often have little motive to improve production
Often set prices well below those that would be established in a market system
Command economies face shortages

Question 10

Self-interested behavior is behind two features of a market economy

Answer 10

private property rights

Market

Question 11

are the rights of individuals and groups to own businesses and resources

Answer 11

Private Property rights

Question 12

is any place where people buy and sell goods and services

Answer 12

The Market

Question 13

is vital to any single sale or exchange

Answer 13

Clear Ownership

Question 14

are necessary to make markets work properly

Answer 14

Private Property Rights

Question 15

The principle that the government should not interfere in the economy is called

Answer 15

Laissez faire

Question 16

The concept of laissez faire is often paired with

Answer 16

Capitalism

Question 17

is an economic system that is based on private ownership of the factors of production

Answer 17

Capitalism

Question 18

the foundation of market economies, operates on the belief that, on their own, producers will create the goods and services that consumers demand

Answer 18

Capitalism

Question 19

is a market economy in its pure form.

Answer 19

Laissez faire capitalism

Question 20

A ______ is a trade in which both traders believe that what they are getting is worth more than what they are giving up

Answer 20

voluntary exchange

Question 21

guides voluntary exchanges

Answer 21

Self-interest

Question 22

is considered a financial gain from a business transaction

Answer 22

Profit

Question 23

is the effort of two or more people, acting independently, to get the business of others by offering the best deal.

Answer 23

Competition

Question 24

is the idea that because consumers are free to purchase what they want and refuse products they do not, they have the ultimate control over what is produced

Answer 24

Consumer sovereignty

Question 25

_____ acts as a control on self-interest behavior, guiding the market toward a balance between higher value and lower prices

Answer 25

Competition

Question 26

____ is a situation in which people concentrate their efforts in the areas in which they have an advantage

Answer 26

Specialization

Question 27

removes the need for households to be self-sufficient, and markets allow households to trade for what they need

Answer 27

Specialization

Question 28

then, leads to higher- quality yet lower- priced products

Answer 28

Specialization

Question 29

The _____ is a tool that economists use to understand how market economies operate

Answer 29

circular flow model

Question 30

The model represents the two key economic decisions makers in market economy

Answer 30

Households

Businesses

Question 31

The_____is for goods and services is called the product market

Answer 31

Market

Question 32

The_____isn’t a place as much as it is set activities

Answer 32

Product Market

Question 33

The____of the product market are business

Answer 33

Suppliers

Question 34

The_____is the market for the factors of production

Answer 34

Factor Market

Question 35

_____ own all the factors of production

Answer 35

Individuals

Question 36

In the factory market, _________ are the Consumers and _______ are the producers

Answer 36

Businesses

Individuals