Econ Unit 2 [ACTUAL EXAM ] LATEST VERSION
[QUESTIONS AND ANSWERS] DETAILED AND VERIFIED FOR
GUARANTEED PASS- LATEST UPDATE 2025 GRADED A
(BRAND NEW!!)
free market - CORRECT ANSWER ✔✔✔✔✔ An economic system in
which prices and wages are determined by unrestricted competition
between businesses, without government regulation
centrally planned economy - CORRECT ANSWER ✔✔✔✔✔ an
economy in which the government decides how economic resources
will be allocated
mixed economy - CORRECT ANSWER ✔✔✔✔✔ an economy that
combines elements of the command and market economies.
safety net - CORRECT ANSWER ✔✔✔✔✔ a set of government
programs that protect people who face unfavorable economic
conditions. Examples: food stamps, public housing, disability
benefits, unemployment benefits, etc.
subsistence - CORRECT ANSWER ✔✔✔✔✔ the state of having just
enough money or food to stay alive. Most people lived this way until
the last 2 centuries
How do markets self regulate? - CORRECT ANSWER ✔✔✔✔✔
People and firms follow prices, which guide their choices to mutually
beneficial outcomes.
How can self interest benefit society at large? - CORRECT ANSWER
✔✔✔✔✔ In order to make money, you have to satisfy the wants and
needs of others.
, specialization - CORRECT ANSWER ✔✔✔✔✔ the development of
skills in a specific kind of work
self-interest - CORRECT ANSWER ✔✔✔✔✔ one's own personal gain
competition - CORRECT ANSWER ✔✔✔✔✔ the struggle among
producers for the dollars of consumers
incentive - CORRECT ANSWER ✔✔✔✔✔ a reason for doing
something; can be positive or negative
Adam Smith - CORRECT ANSWER ✔✔✔✔✔ The first economist.
Pro-free market
Factor Market - CORRECT ANSWER ✔✔✔✔✔ market in which firms
purchase the factors of production (labor and other resources) from
households
Product Market - CORRECT ANSWER ✔✔✔✔✔ the market in which
households purchase the goods and services that firms produce
Differences between socialism and communism - CORRECT ANSWER
✔✔✔✔✔ Communist countries are authoritarian, have no private
property, and the government controls the whole economy; socialist
countries can have democracy and private property, but the
government still controls most of the economy.
What was China's strategy for growing its economy starting in the
1980s? - CORRECT ANSWER ✔✔✔✔✔ Open up markets, open up
trade with the rest of the world to start making money through
exports
What was the main reason for the failure of the Soviet Union's
economy? - CORRECT ANSWER ✔✔✔✔✔ Planning didn't work
because planners received bad information. Planners received bad
information because everyone was incentivized to lie, and they didn't
know what consumers wanted.
[QUESTIONS AND ANSWERS] DETAILED AND VERIFIED FOR
GUARANTEED PASS- LATEST UPDATE 2025 GRADED A
(BRAND NEW!!)
free market - CORRECT ANSWER ✔✔✔✔✔ An economic system in
which prices and wages are determined by unrestricted competition
between businesses, without government regulation
centrally planned economy - CORRECT ANSWER ✔✔✔✔✔ an
economy in which the government decides how economic resources
will be allocated
mixed economy - CORRECT ANSWER ✔✔✔✔✔ an economy that
combines elements of the command and market economies.
safety net - CORRECT ANSWER ✔✔✔✔✔ a set of government
programs that protect people who face unfavorable economic
conditions. Examples: food stamps, public housing, disability
benefits, unemployment benefits, etc.
subsistence - CORRECT ANSWER ✔✔✔✔✔ the state of having just
enough money or food to stay alive. Most people lived this way until
the last 2 centuries
How do markets self regulate? - CORRECT ANSWER ✔✔✔✔✔
People and firms follow prices, which guide their choices to mutually
beneficial outcomes.
How can self interest benefit society at large? - CORRECT ANSWER
✔✔✔✔✔ In order to make money, you have to satisfy the wants and
needs of others.
, specialization - CORRECT ANSWER ✔✔✔✔✔ the development of
skills in a specific kind of work
self-interest - CORRECT ANSWER ✔✔✔✔✔ one's own personal gain
competition - CORRECT ANSWER ✔✔✔✔✔ the struggle among
producers for the dollars of consumers
incentive - CORRECT ANSWER ✔✔✔✔✔ a reason for doing
something; can be positive or negative
Adam Smith - CORRECT ANSWER ✔✔✔✔✔ The first economist.
Pro-free market
Factor Market - CORRECT ANSWER ✔✔✔✔✔ market in which firms
purchase the factors of production (labor and other resources) from
households
Product Market - CORRECT ANSWER ✔✔✔✔✔ the market in which
households purchase the goods and services that firms produce
Differences between socialism and communism - CORRECT ANSWER
✔✔✔✔✔ Communist countries are authoritarian, have no private
property, and the government controls the whole economy; socialist
countries can have democracy and private property, but the
government still controls most of the economy.
What was China's strategy for growing its economy starting in the
1980s? - CORRECT ANSWER ✔✔✔✔✔ Open up markets, open up
trade with the rest of the world to start making money through
exports
What was the main reason for the failure of the Soviet Union's
economy? - CORRECT ANSWER ✔✔✔✔✔ Planning didn't work
because planners received bad information. Planners received bad
information because everyone was incentivized to lie, and they didn't
know what consumers wanted.
