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Essentials of Economics, 4e (Brue)
Chapter 2 The Market System and the Circular Flow
1) Economic systems differ according to what two main characteristics?
A) Ownership of resources and methods of coordinating economic activity.
B) Quantity of output produced and who receives the output.
C) Who produces the output and what technology is used to produce it.
D) The system of government and the quantity of natural resources available.
2) The private ownership of property resources and use of prices to direct and coordinate
economic activity is characteristic of:
A) a command system.
B) a market system.
C) communism.
D) socialism.
3) In a capitalistic economy:
A) consumers are not sovereign.
B) markets are not competitive.
C) there is a reliance on the market system.
D) the government owns the means of production.
4) Which statement best describes a capitalist economy?
A) The production of goods and services is determined primarily by markets, but the allocation
of goods and services is determined primarily by government.
B) The production of goods and services is determined primarily by government, but the
allocation of goods and services is determined primarily by markets.
C) The production and allocation of goods and services is determined primarily through markets.
D) The production and allocation of goods and services is determined primarily through
government.
5) Which statement best describes a command economy?
A) The production of goods and services is determined primarily by markets, but the allocation
of goods and services is determined primarily by government.
B) The production of goods and services is determined primarily by government, but the
allocation of goods and services is determined primarily by markets.
C) The production and allocation of goods and services is determined primarily through markets.
D) The production and allocation of goods and services is determined primarily through
government.
6) Which would not be characteristic of a capitalist economy?
A) Government ownership of the factors of production.
B) Competition and unrestricted markets.
C) Reliance on the market system.
D) Free enterprise and choice.
1
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,DOWNLOAD THE Test Bank for Essentials of Economics 4th Edition Brue
7) A basic characteristic of a command system is that:
A) wages paid to labor are higher.
B) government owns most economic resources.
C) markets function mostly free from government intervention.
D) government planners play a limited role in deciding what goods will be produced.
8) The market system is an economic system that:
A) produces more consumer goods than capital goods.
B) produces more capital goods than consumer goods.
C) gives private individuals and institutions the right to own resources used in production.
D) gives the government the right to tax individuals and corporations for the production of
capital goods.
9) Another term for capitalism is the:
A) command system.
B) socialist economy.
C) market system.
D) system of inputs and outputs.
10) Capitalism is an economic system that:
A) produces more capital goods than consumer goods.
B) produces more consumer goods than capital goods.
C) is characterized by government control of markets.
D) gives private individuals and corporations the right to own productive resources.
11) The Soviet Union economy of the 1980s would best be classified as:
A) a market system.
B) pure capitalism.
C) laissez-faire capitalism.
D) a command system.
12) The economy of South Korea would best be classified as:
A) a command system.
B) socialism.
C) pure capitalism.
D) a market system.
13) The economy of North Korea would best be classified as:
A) a laissez-faire economy.
B) a command system.
C) a capitalist economy.
D) a market system.
2
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14) The economy of Cuba most closely approximates:
A) laissez-faire capitalism.
B) a command economy.
C) pure capitalism.
D) a market economy.
15) Since the end of World War II:
A) the economies of both North Korea and South Korea have grown at approximately the same
rate.
B) both North and South Korea have adopted command economies.
C) North Korea's economy has achieved greater economic growth than South Korea.
D) the South Korean economy has grown faster than North Korea's economy.
16) Which of the following statements is most accurate about the economies of North Korea and
South Korea?
A) The economies of both North Korea and South Korea have grown at approximately the same
rate since Korea was divided after World War II.
B) Since their division after World War II, South Korea has grown much faster than North
Korea, but their GDP per capita remains roughly equal.
C) Since their division after World War II, North Korea's economy has achieved
greater economic growth than South Korea.
D) Starting from similar economic positions prior to their division after World War II, South
Korea's economy has grown to about 40 times the size of the North Korean economy.
17) The market system is characterized by:
A) extensive government constraints on individual behavior.
B) private ownership of the means of production.
C) government control of all production decisions.
D) government rationing of all goods and services.
18) In a market system, well-defined property rights are important because they:
A) reduce unnecessary investment.
B) limit destructive economic growth.
C) create economic problems.
D) encourage economic activity.
19) Which is a major feature of the market system?
A) Government-established prices in all markets.
B) Reallocation of all resources from private to public uses.
C) The right to own private property and control resource uses.
D) Central planning by government to provide goods and services.
3
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Essentials of Economics, 4e (Brue)
Chapter 2 The Market System and the Circular Flow
1) Economic systems differ according to what two main characteristics?
A) Ownership of resources and methods of coordinating economic activity.
B) Quantity of output produced and who receives the output.
C) Who produces the output and what technology is used to produce it.
D) The system of government and the quantity of natural resources available.
2) The private ownership of property resources and use of prices to direct and coordinate
economic activity is characteristic of:
A) a command system.
B) a market system.
C) communism.
D) socialism.
3) In a capitalistic economy:
A) consumers are not sovereign.
B) markets are not competitive.
C) there is a reliance on the market system.
D) the government owns the means of production.
4) Which statement best describes a capitalist economy?
A) The production of goods and services is determined primarily by markets, but the allocation
of goods and services is determined primarily by government.
B) The production of goods and services is determined primarily by government, but the
allocation of goods and services is determined primarily by markets.
C) The production and allocation of goods and services is determined primarily through markets.
D) The production and allocation of goods and services is determined primarily through
government.
5) Which statement best describes a command economy?
A) The production of goods and services is determined primarily by markets, but the allocation
of goods and services is determined primarily by government.
B) The production of goods and services is determined primarily by government, but the
allocation of goods and services is determined primarily by markets.
C) The production and allocation of goods and services is determined primarily through markets.
D) The production and allocation of goods and services is determined primarily through
government.
6) Which would not be characteristic of a capitalist economy?
A) Government ownership of the factors of production.
B) Competition and unrestricted markets.
C) Reliance on the market system.
D) Free enterprise and choice.
1
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written consent of McGraw-Hill Education.
mynursytest.store
,DOWNLOAD THE Test Bank for Essentials of Economics 4th Edition Brue
7) A basic characteristic of a command system is that:
A) wages paid to labor are higher.
B) government owns most economic resources.
C) markets function mostly free from government intervention.
D) government planners play a limited role in deciding what goods will be produced.
8) The market system is an economic system that:
A) produces more consumer goods than capital goods.
B) produces more capital goods than consumer goods.
C) gives private individuals and institutions the right to own resources used in production.
D) gives the government the right to tax individuals and corporations for the production of
capital goods.
9) Another term for capitalism is the:
A) command system.
B) socialist economy.
C) market system.
D) system of inputs and outputs.
10) Capitalism is an economic system that:
A) produces more capital goods than consumer goods.
B) produces more consumer goods than capital goods.
C) is characterized by government control of markets.
D) gives private individuals and corporations the right to own productive resources.
11) The Soviet Union economy of the 1980s would best be classified as:
A) a market system.
B) pure capitalism.
C) laissez-faire capitalism.
D) a command system.
12) The economy of South Korea would best be classified as:
A) a command system.
B) socialism.
C) pure capitalism.
D) a market system.
13) The economy of North Korea would best be classified as:
A) a laissez-faire economy.
B) a command system.
C) a capitalist economy.
D) a market system.
2
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written consent of McGraw-Hill Education.
mynursytest.store
, DOWNLOAD THE Test Bank for Essentials of Economics 4th Edition Brue
14) The economy of Cuba most closely approximates:
A) laissez-faire capitalism.
B) a command economy.
C) pure capitalism.
D) a market economy.
15) Since the end of World War II:
A) the economies of both North Korea and South Korea have grown at approximately the same
rate.
B) both North and South Korea have adopted command economies.
C) North Korea's economy has achieved greater economic growth than South Korea.
D) the South Korean economy has grown faster than North Korea's economy.
16) Which of the following statements is most accurate about the economies of North Korea and
South Korea?
A) The economies of both North Korea and South Korea have grown at approximately the same
rate since Korea was divided after World War II.
B) Since their division after World War II, South Korea has grown much faster than North
Korea, but their GDP per capita remains roughly equal.
C) Since their division after World War II, North Korea's economy has achieved
greater economic growth than South Korea.
D) Starting from similar economic positions prior to their division after World War II, South
Korea's economy has grown to about 40 times the size of the North Korean economy.
17) The market system is characterized by:
A) extensive government constraints on individual behavior.
B) private ownership of the means of production.
C) government control of all production decisions.
D) government rationing of all goods and services.
18) In a market system, well-defined property rights are important because they:
A) reduce unnecessary investment.
B) limit destructive economic growth.
C) create economic problems.
D) encourage economic activity.
19) Which is a major feature of the market system?
A) Government-established prices in all markets.
B) Reallocation of all resources from private to public uses.
C) The right to own private property and control resource uses.
D) Central planning by government to provide goods and services.
3
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written consent of McGraw-Hill Education.
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