Chapter 2 Test: Economic Systems

The way a society uses scarce resources to satisfy its people’s unlimited wants is called an economic

• system

• utility

• incentive

• grid

Absolute loyalty to the people in power is required by a(n)

• traditional system

• socialist system

• authoritarian system

• market system

Between 1867 and 1894, Karl Marx published a 3-volume study called

• The Communist Manifesto

• Capital

• The Wealth of Nations

• Laissez Faire

The government owns some, but not all, factors of production in a(n)

• authoritarian system

• communist system

• pure market system

• socialist system

In economic terms, property means

• everything an individual owns and the labor he/she provides

• everything an individual owns but not the labor he/she provides

• some things an individual owns and the labor he/she provides

• some things an individual owns but not the labor he/she provides

With voluntary exchange, a buyer and seller agree to do business together

• only for the benefit of the seller

• only for the benefit of the buyer

• for the mutual benefit of both

• for the benefit of neither

In a market economy, the real power in the market place is held by the

• producer

• seller

• government

• consumer

A circular flow model shows how

• all interactions occur in a market economy

• some interactions occur in a market economy

• all interactions occur in a traditional economy

• some interactions occur in a traditional economy

An advantage of a pure market economy is that it

• has mechanisms for providing public goods

• allows local communities to set their own economic development

• provides security to those who are not economically productive

• prevents unequal distribution of wealth

In a factor market

• business firms are customers and individuals are producers

• individuals are customers and businesse firms are producers

• businesse firms sell productive resources

• individuals buy goods and services