unit 3 - role of consumers

Question 1

what is an economic system based on capitalism in which there is free competition in the exchange of goods and services?

Answer 1

market economy

Question 2

What is NOT an advantage to market economies?

Answer 2

Markets have a tendency to increase income inequality, making the rich richer and the poor poorer. Income inequality also concentrates more power in the hands of firms or individuals who have greater financial resources.

Question 3

What was the main capitalistic factor behind the idea of communism?

Answer 3

income inequality

Question 4

What is a mixed economy?

Answer 4

An economy that combines characteristics of traditional, market, and command economies.

Question 5

What is it called when the government uses the media to persuade citizens to act in a way that deems it better for the people?

Answer 5

moral suasion

Question 6

How many main components are in a market economy?

Answer 6

six

Question 7

Adam Smith, often called the father of modern economics, wrote what book in 1776?

Answer 7

the wealth of nations

Question 8

What two items were prominently featured on the flag of the Soviet Union?

Answer 8

hammer and sickle

Question 9

What is the belief that resources and the means of production should be publicly owned and that economic decisions should be made by a central authority on behalf of society?

Answer 9

communism

Question 10

What book did Karl Marx write with Fredrick Engels that outlined the ideals of Communism?

Answer 10

the communist manifesto

Question 11

What is NOT an advantage of a command economy?

Answer 11

There is less incentive to work hard or produce an excellent product because all workers receive the same wages. Quality production may be lacking and production can decline over time.

Question 12

Define a monopoly.

Answer 12

A market situation where one firm dominates an entire industry and controls supply and trade of a certain good or service.

Question 13

What reason does NOT help to explain why mixed economies are the most common type of economy in today’s world?

Answer 13

Mixed economies encourage monopolies, which help the economy grow.

Question 14

What is the state of limited resources to satisfy unlimited wants?

Answer 14

scarcity

Question 15

When a decision needs to be made, what two things must an individual or company look at?

Answer 15

options and trade-offs

Question 16

What are some things that producers use to incentivize consumers?

Answer 16

offering discounts, additional services, bonus points for future purchases

Question 17

What do markets base on how they allocate resources?

Answer 17

consumers’ willingness to pay

Question 18

Which of the following is an incentive?

Answer 18

Offering a free tote bag if a customer buys more than $50 worth of products in the store is an incentive.

Question 19

Who stated that the government had one main purpose - to protect natural rights?

Answer 19

john locke

Question 20

What are the rights of an individual to control their possessions as they wish?

Answer 20

private property rights