ch 2 multiple choice

ch 2 multiple choice - Question 1 1 out of 1 points The...

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Question 1 1 out of 1 points The private ownership of property resources and use of markets and prices to direct and coordinate economic activity is characteristic of: Selected Answer: a market economy Correct Answer: a market economy Feedback: Correct! See p. 29 of the text. Socialism, communis m, and command economic structures are characteriz ed by governme nt ownership of resources. Question 2 0 out of 1 points Which is one of the main characteristics of the market system?
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Selected Answer: central economic planning Correct Answer: the right to own private property Feedback: In a market economy, property is owned privately, not by the governme nt. Limits on choice, central planning, and a large role for governme nt would be characteris tic of command, not market- based economies . See p. 29-30 in the text. Question 3 0 out of 1 points In the market system, freedom of enterprise means that
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Selected Answer: consumers are free to buy goods and services that they want Correct Answer: businesses are free to produce products that consumers want
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Feedback: Enterprise here refers to the actions of businesse s in terms of what they produce and how they produce it. Consumer s being free to buy goods is freedom of choice. "Free" here though doesn't literally mean that there is no price charged, however. See p. 30 of the text. Question 4 1 out of 1 points The maximization of profit tends to be the driving force in the economic decision making of Selected Answer: entrepreneurs Correct Answer: entrepreneurs
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Feedback: Correct! The profit motive is what drives entreprene urs to start and run businesse s. See p. 30-31 of the text. Question 5 0 out of 1 points How do consumers typically express self-interest? Selected Answer: by minimizing their economic losses Correct Answer: by seeking the lowest price for a product
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Feedback: Economic profits and losses are the domain of businesse s. When I'm acting as a consumer (in the product market), however, I'm buying goods. Seeking jobs with the highest benefits would be what a seller in the resource market would do in terms of their self- interest. See p. 30- 31 of the text. Question 6 1 out of 1 points Which is a characteristic of competition as economists see it?
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Selected Answer: the widespread diffusion of economic power Correct Answer: the widespread diffusion of economic power Feedback: Correct! Competitio n requires a large number of buyers and sellers, and easy entry and exit from industries. As a result, economic power by any one economic agent is limited. See p. 31 of the text. Question 7 0 out of 1 points To decide how to use its scarce resources to satisfy economic wants, a market economy primarily relies on
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Answer: production targets Correct Answer: prices Feedback: Monopoly power could result in the inefficient use of scarce resources, while planning and production targets are characteris tic of command, not market, economies . Prices are the primary method used in market economies to direct where resources are used. See p. 31
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ch 2 multiple choice - Question 1 1 out of 1 points The...

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