The Free Market

Who is considered the father of modern economics?

• John Maynard Keynes

• Milton Friedman

• Adam Smith

• Karl Marx

What is defined as 'allocating productive resources to their most highly valued uses'?

• Monopoly

• Competition

• Market Equilibrium

• Supply and Demand

What is the most straightforward way for sellers to compete for customers?

• Improving product quality

• Extending service hours

• Competing on price

• Innovating new products

What happens in a market when there is no competition?

• Prices decrease

• Monopolies can form

• More choices for consumers

• Quality of products decreases

What is a consequence of competition besides lowering prices?

• Increase in monopolies

• Decrease in product quality

• Decrease in consumer satisfaction

• Range of choices and innovation

What defines the ultimate price and quality of goods in a free market?

• Emergent order

• Supplier decisions

• Consumer indifference

• Government regulations

What market condition exists when just a few companies share the market?

• Perfect competition

• Free market

• Oligopoly

• Monopoly

What do governments need to do for markets to function properly?

• Decrease competition

• Support monopolies

• Increase taxes on companies

• Break monopolies up

What usually leads to lower prices, innovation, and higher living standards?

• Monopolies

• Competition

• Government intervention

• Limited supply

What is the effect of monopolies on the market?

• Lower prices

• Increase in consumer choice

• Higher prices, inferior products, and lower living standards

• Stimulation of innovation