economics chapter 2 review – Flashcards
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capitalism is a competitive economic system in which private citizens own the factors of production
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true
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voluntary exchange is a characteristic of command economies
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false
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the profit motive states that the consumer decides what goods and services to produce
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false
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the entrepreneur organizes land, capital, and labor for production in hopes of earning a profit
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true
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the United States has a modified private enterprise economy
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true
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the purpose of government in a command economy is to
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make major economic decisions
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an example of a market economy
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the United States
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which of the following is not considered an economic and social goal?
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entrepreneurship
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which group of people ultimately determines the products that a free enterprise economy produces?
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consumers
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the United States can best be described as having a
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modified private enterprise system
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all of the following are characteristics of a command economy except
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there is much uncertainty
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a market economy
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does not provide for everyone's basic needs
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the minimum wage is an example of a federal law that supports
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economic equity
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the concept of voluntary exchange means
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people freely and willingly engage in market transactions
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the governments role in a mixed economy is that it is the
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regulator charged with preserving competition
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which of the following is not a basic economic question?
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when to produce
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what is the fundamental problem of economics?
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scarcity
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all of the following are weaknesses of a command economy except that it
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can change direction drastically in a short time
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which of the following societies are examples of traditional economies?
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African Mbuti, Australian Aborigines
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who would you most likely find participating in a market economy?
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a teenage girl deciding how to spend the extra money she earned working overtime
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what is another term for a modified private enterprise economy?
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mixed economy
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why are entrepreneurs important in a free enterprise economy?
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entrepreneurs start new businesses
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how do consumers exercise their power in the American economy?
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by deciding what to purchase
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who plays the roles of protector, consumer, regulator, and promoter of economic goals in the United States?
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government
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economic goals are important because they
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help people determine if an economic system meets their needs
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which is an example of economic growth?
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when a new ball bearing plant opens, 1500 jobs are created
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why is economic growth an important goal of the United States?
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economic growth is needed to better satisfy the wants and needs of a growing population
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which of the following is not an example of a trade off among social and economic goals?
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a military dictator seizes control of a nations government
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why does even a free market economy need some government intervention?
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to provide for things that the marketplace does not address
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what is one of the most important advantages of a free market?
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it encourages growth
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what incentive motivates a manufacturer to sell a product?
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making profits on sales
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which of the following was a free market philosopher?
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Adam Smith
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what is the function of an economic system?
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to produce and distribute goods and services
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what is an important advantage of a free market?
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it offers a wide variety of goods and services
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which of the following is not a major economic and social goals of the United States?
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economic interdependence
