Econ 2-2 review

What is a market in economic terms?

• A place where only physical goods are exchanged
• A system where buyers and sellers interact to trade goods or services
• A government-controlled distribution center
• A type of financial institution

Which term describes the focus on producing a specific good or service?

• Generalization
• Diversification
• Monopolization
• Specialization

In a free market economy, who determines the prices of goods and services?

• The government
• Large corporations
• Supply and demand
• International trade agreements

What is the economic definition of a household?

• A group of people living together
• The basic economic unit of consumers in an economy
• A place where goods are manufactured
• A type of business organization

In economics, what is a firm?

• A government agency that regulates trade
• An organization that produces goods or services for profit
• A group of investors in the stock market
• A type of consumer advocacy group

What economic concept describes individuals acting in their own best interest?

• Altruism
• Collectivism
• Self-interest
• Socialism

What drives businesses to improve products and lower prices in a market economy?

• Government regulations
• Consumer sovereignty
• Competition
• Invisible hand

Adam Smith's "invisible hand" refers to:

• Government control of the economy
• The unseen force that guides free market economies
• A type of economic manipulation
• The visible effects of supply and demand

What term describes the power of consumers to influence the market through their choices?

• Market domination
• Producer authority
• Government intervention
• Consumer sovereignty

Which of the following is NOT typically associated with a free market economy?

• Private property rights
• Government central planning
• Voluntary exchange
• Price signals