Foundaitons
What are the three major economic questions each nation must ask itself in order to select their economic system?
1) What product will we produce.
2) How will we produce said product?
3) Who will we produce the product for?
What kind of economy does Hong Kong have? (HINT: They are the BEST modern example of this kind of economy).
Free Market Economy
In a free market economy, who owns the factors of production?
A: Individuals & Consumers
B: Businesses & The Government
C: The Government & Lobbyists
D: Businesses & Individuals
D: Businesses & Individuals
The Soviet Union is what kind of economy?
Command Economy
What two key entities are involved in a free market system?
A: Governments & Firms
B: Governments & Households
C: Households & Firms
D: All of the above
C: Households & Firms
Who wrote The Wealth of Nations?
Adam Smith
What kind of economy did the Soviet Union have?
Command Economy
In a free-market system, product distribution is based on ______ distribution.
A: Income
B: Socialist
C: Incentive
D: Efficiency
A: Income
What political philosophy, rising out of socialism, involves a centrally planned economy with all economic and political power resting in the hands of the government?
A: Socialism
B: Fascism
C: Communism
D: Monarchism
C: Communism
Communists believe the way to establish communism is through a what?
A: Violent Revolution
B: Peaceful Protest
C: Free Market Economy
D: Traditional Economy
A: Violent Revolution
What type of leader usually lies at the center of a communist nation?
Elected Monarch OR Authoritarian Dictator
Authoritarian Dictator
Native American culture is an example of a _______ economic system.
Traditional
The power of consumers to decide what gets produced is known as what?
A: Consumer Sovereignty
B: Production Choice
C: Production Sovereignty
D: Consumer Choice
A: Consumer Sovereignty
What did lack of agricultural production lead to in the S.U.?
Food shortages, causing starvation.
The ______ described by Adam Smith is the phenomenon that binds competition and self-interest without any central planning?
A: Domestic System
B: Competition
C: Self-Interest
D: Invisible Hand
D: Invisible Hand
Does economic equity mean everyone gets paid the same?
NO: people get paid based off class
NO: people get paid fairly
No, people get paid fairly.
What economic system entails voluntary exchange dictating decisions on production and consumption of goods?
Market Economy
Why is specialization important in a free-market economy?
A: It increases competition
B: It decreases competition
C: Incentivized Economies
D: We are not self-sufficient
D: We are not self-sufficient
What were large, state-run farms under Soviet government control called?
Collectives
Why have most market economies transitioned to mixed economies?
A: The government wants more control of ppl's daily lives.
B: Only the government can efficiently meet certain production.
C: The government wants to regulate private industry.
D: The government wants more taxation on its citizens.
B: Only the government can efficiently meet certain production.
What kind of economy does North Korea have?
Command
What kind of economy does the U.S. have:
Free-Market, Mixed-Market, or Market?
Mixed-Market Economy
Achieving any economic goal involves an economic _________
A: incentive
B: competition
C: trade-off
D: none of the above
C: trade-off
In the guns or butter dilemma, the Soviet Union chose guns. Explain which type of products they chose to spend government dollars on, and explain the opportunity cost of their citizens because of this decision.
Space Exploration, Rockets & Missiles, etc.
Agriculture suffered, leading to starvation. Housing suffered, leading to homelessness, etc.
All of the following are three ways that firms purchase the factors of production from households in a free market system EXCEPT what?
A: Hire & Pay Workers
B: Purchase or Rent Land
C: Tax Individuals
D: Borrow Money to Purchase Capital
C: Tax Individuals