EC 201 Practice_Final Quiz 1

EC 201 Practice_Final Quiz 1 - QUIZ CHAPTER 1-2 Chapter 1...

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Unformatted text preview: QUIZ CHAPTER 1-2 Chapter 1 Economic theory asserts that people will behave in ways that Student Response Value Correct Answer Feedback A. will be unfair to others. B. will enhance their own overall well-being. 100% Correct. Economists assume that people make choices based on what they expect will serve their own best interests. Page: 9 C. will not take advantage of opportunities for self- improvement. D. do not follow generally predictable patterns. Score: 100% Adam Smith used the idea of the invisible hand to refer to the ability of market economies to Student Response Value Correct Answer Feedback A. recover from recessions. 0% Incorrect. In The Wealth of Nations, Smith talked about how producers supply us with the goods we want to consume because they are acting in their own best interest. In other words, they will not earn a profit unless they are providing goods that consumers want to buy. Page: 3 B. solve the problem of market failure. C. harness the power of individual self-interest for the good of society as a whole. D. convince people that society is better off if its members sacrifice their own self-interest for the cause of the greater good. Score: 0% The focal point of economic inquiry is Student Response Value Correct Answer Feedback A. the stock market. B. the value of the dollar. C. individual choice. 100% Correct. In particular, economists look at how decisions are made at the margin. Page: 6 D. business ethics. Score: 100% Exchanges taking place in a market system Student Response Value Correct Answer Feedback A. are voluntary. B. are inefficient. C. will benefit one party at the expense of another. D. are monitored by the government to ensure that scarce resources are being used wisely. 0% Incorrect. Market exchanges occur when both parties expect to benefit. Page: 2 Score: 0% Which one of the following statements is true of a command economy but not t rue of a market economy? Student Response Value Correct Answer Feedback A. Productive resources are scarce. B. Every choice involves an opportunity cost. C. A central planning authority makes decisions about production and consumption. 100% Correct. Command economies, just like market economies, are characterized by scarcity and opportunity cost. And individuals operating within them respond to incentives. But in a command economy, the incentives are determined by a central authority. Page: 2 D. People will respond to incentives. Score: 100% The purpose of an economic system is to Student Response Value Correct Answer Feedback A. eliminate scarcity. 0% Incorrect. In a command economy, the allocation decisions are make by a central authority. In a market economy, they are made by the collective effect of individual decisions. Page: 7 B. protect the environment....
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EC 201 Practice_Final Quiz 1 - QUIZ CHAPTER 1-2 Chapter 1...

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