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1 | |
For a market economy to exist, the government must |
| | A) | set prices. |
| | B) | control resources. |
| | C) | allocate and defend private property rights. |
| | D) | stay out of the economy entirely. |
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2 | |
Self interest is |
| | A) | one reason market economies don't work very well. |
| | B) | discouraged in market economies. |
| | C) | irrelevant to market economies. |
| | D) | is an important and useful part of market economies. |
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3 | |
In theory, socialism is an economic system that relies on |
| | A) | people's self interest and society's determination of the answers to the three economic questions. |
| | B) | people's good will towards others and society's determination of the answers to the three economic questions. |
| | C) | people's self interest and the private ownership of the means of production by a small group of people. |
| | D) | people's good will towards others and private ownership of the means of production are by a small group of people. |
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4 | |
Mercantilism was an economic system known for |
| | A) | its heavy reliance on tradition. |
| | B) | the government's role in doling out the rights to undertake economic activity. |
| | C) | it's reliance on private property and self interest. |
| | D) | merchants answering the three basic economic questions. |
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5 | |
In the factor market, |
| | A) | businesses both supply and demand factors of production. |
| | B) | households supply factors of production which are demanded by businesses. |
| | C) | businesses supply factors of production which are demanded by households. |
| | D) | businesses supply goods and services which are demanded by households. |
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6 | |
In market-oriented economies like the United States, the actual decisions of what to produce, how to make it, and for whom to produce it, are made by |
| | A) | the government. |
| | B) | households. |
| | C) | businesses. |
| | D) | tradition. |
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7 | |
The principle of consumer sovereignty |
| | A) | is violated if businesses decide what to produce. |
| | B) | says that the government should protect consumers from businesses. |
| | C) | says that, ultimately, consumers' preferences shape what is produced. |
| | D) | was a key characteristic of feudalism. |
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8 | |
Most businesses in the US are |
| | A) | sole proprietorships |
| | B) | partnerships |
| | C) | corporations |
| | D) | not-for profit organizations. |
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9 | |
Of the three types of businesses, the one that can attract financing most easily is |
| | A) | sole proprietorships |
| | B) | partnerships |
| | C) | corporations |
| | D) | hey, I wish I could attract some financing. |
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10 | |
Government is an important part of the US economy because it |
| | A) | makes up two thirds of the economy. |
| | B) | is responsible for answering the three economic questions. |
| | C) | controls the factors of production. |
| | D) | sets the rules of interaction between households and businesses and it acts as a referee to enforce these rules. |
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