Unit 2 Practice Quiz

What two factors do all three economic questions concern?

• Goods and Services

• Needs and Wants

• Money and Resources

• Economics and Scarcity

What is a Safety Net?

• A set of Government programs that brings new methods, products, and ideas

• A set of Government programs that leads to efficiency, freedom, and security

• A set of Government programs that protect people who face unfavorable economic conditions

• A set of Government programs that meets the goods and services of society

The Industrial Revolution led to immense economic growth

• True

• False

What is a Market?

• Any arrangement that allows people to buy food and clothes

• Any arrangement that allows buyers and sellers to exchange things

• Any arrangement that allows money and goods to be exchanged

• Any arrangement that allows goods and serviced to be used

What is a Free Market Economy?

• Economic system in which the three basic economic questions are based on voluntary exchange in markets

• Economic system in which the three basic economic questions are answered by the government

• Economic system in which the three basic economic questions are answered by market based elements and government involvement

• Economic system in which the three basic economic questions are answered by a dictator

What is another name for a free market economy?

• Factor Economy

• Command Economy

• Entrepreneur Economy

• Capitalist Economy

Which country is known for having a free market economy?

• China

• Canada

• United States

• Mexico

Who are the two participants in a free market economy?

• Households and Firms

• Government and Banks

• Households and Government

• Banks and Firms

Which historical figure is known for coining the term "The Invisible Hand"?

• Adam Smith

• Karl Marx

• John Locke

• Thomas Hobbes

Specialization leads to efficiency in land, labor, and capital

• True

• False