REVIEW Chapter 2

Which of these is NOT a factor payment? A. wages B. rent C. taxes D. none of these

Which of these is NOT one of the three economic questions? A. How will we insure there will be resources for the goods/services? B. Who shall consume the goods/services? C. What goods/services shall we produce? D. How shall we produce the goods/services?

Which of these is not considered an Economic Goal? A. economic freedom B. economic leadership C. economic security and predictability D. economic equity

In which market do households sell and firms buy? A. Factor market B. Product market

In a command economic system, the government answers the three economic questions. A. True B. False

In the U.S. we DO NOT want the government to provide us an economic “safety net”. A. True B. False

Concentrating your efforts on limited activities is A. regulation B. specialization C. positive productivity D. factor of labor

A traditional economic system answers “What shall we produce?” by A. the government B. the producers (sellers) C. the buyers D. customs and habits

A reason markets exist is A. We do not need as much as in the past B. We are not self-sufficient C. We are using more technology D. We do not want to trade outside the U.S.

Competition is the “regulating” force in the marketplace. A. True B. False

Which of these economic systems does the government have the least involvement? A. command B. mixed economy C. free market D. A and B

Which of these do we NOT attribute to Adam Smith? A. “The Centrally Planned Economy” B. “The Wealth of Nations” C. “Laissez Faire” D. “The Invisible Hand”

Self-interest is the “motivating” force in the marketplace. A. True B. False

In which market do firms sell and households buy? A. Factor market B. Product market

Workers are usually highly motivated in a command economy due to the fact they are paid for the amount of work they do. A. True B. False