Question 1

If we were to examine the economic record of the former Soviet Union and China during the 1980s, we could reasonably conclude that

Accepted Answer

A)  China was successful and the Soviet Union was not.
B)  The Soviet Union was successful and China was not.
C)  Both the Soviet Union and China were successful.
D)  Neither China nor the Soviet Union were successful.

Question 2

In the former Soviet Union most of the farmland was in the form of ____________________.

Accepted Answer

The answer of In the former Soviet Union most of...

Question 3

Which statement is true?

Accepted Answer

A)  American industry is very competitive.
B)  There is no competition in American industry.
C)  In order to have competition you need to have many firms in an industry.
D)  The automobile and computer software industries are good examples of competition at work.

Question 4

Which of the following economic functions does the U.S. government perform?

Accepted Answer

A)  Collects taxes
B)  Provides services
C)  Issues regulations
D)  The U.S.government performs all of these tasks D

Question 5

Statement I. The circular flow model oversimplifies the exchanges in our economy. Statement II. Most of the money received by households in the form of wages, rent, interest, and profits flows back to business firms in the form of consumer expenditures.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false. C

Question 6

Which one of the following is NOT a government failure?

Accepted Answer

A)  The "bridge to nowhere" in Alaska
B)  The FEMA reaction to Hurricane Katrina
C)  Allowing federal budget deficits to be financed by foreigners while calling for further tax cuts to help incumbent politicians get reelected
D)  Water pollution

Question 7

How many households receive their incomes mainly from the business sector?

Accepted Answer

A)  300 million
B)  117 million
C)  50 million
D)  39 million

Question 8

Which one of the following is not a mixed economy?

Accepted Answer

A)  United States
B)  China
C)  Japan
D)  Sweden
E)  All of the countries listed are mixed economies.

Question 9

Lack of the provision of public goods is considered a ______________ _____________.

Accepted Answer

The answer of Lack of the provision of public goods...

Question 10

Adam Smith

Accepted Answer

A)  argued that capitalism is often confused with democracy.
B)  wrote Das Kapital.
C)  said that the entrepreneur is motivated by self-interest.
D)  coined the phrase: "From each according to his ability, to each according to his needs."

Question 11

The government performs each of the following economic functions except

Accepted Answer

A)  collecting taxes.
B)  spending.
C)  issuing regulations.
D)  operating the price mechanism.

Question 12

Which of the following statements is true?

Accepted Answer

A)  When the forces of supply and demand determine for whom goods are produced in a society, an equitable distribution of income will naturally result.
B)  An external benefit will occur when a third party enjoys some of the benefits derived from production of some good or service.
C)  One of the roles of our government is to provide a job to any able-bodied person who wants a job.
D)  The price mechanism will work well if there are at least two companies that are competing against each other.

Question 13

If a nation starts out with very little capital

Accepted Answer

A)  it can increase its capital if it is able to divert productive resources from producing consumer goods to producing capital goods.
B)  the process of diverting some resources from producing consumer goods to producing capital goods will most likely be quite painful.
C)  if it is lucky enough to possess a valuable commodity that the industrial world wants, such as oil, it can sell its oil in exchange for plant and equipment and thus industrialize.
D)  All of the choices are true.

Question 14

Karl Marx believed that inevitably there would be a clash between ____________ and ____________, leading to an overthrow of capitalism.

Accepted Answer

capitalist...

Question 15

The Chinese economy was set back by

Accepted Answer

A)  the Great Leap Forward, but not the Cultural Revolution.
B)  the Cultural Revolution, but not the Great Leap Forward.
C)  both the Cultural Revolution and the Great Leap Forward.
D)  neither the Cultural Revolution nor the Great Leap Forward.

Question 16

Which statement is the most accurate?

Accepted Answer

A)  Ordering a pencil for work in a communist economy usually is less complicated than the same process in a capitalist economy.
B)  Rules and regulations bind Communist bureaucrats because there is no trust that a bureaucrat can make simple business decisions.
C)  Because of underlying trust, business flows smoothly in virtually all communist societies.
D)  Ordering a pencil for work is equally complicated in a capitalist and a communist business.

Question 17

Karl Marx said that whoever controlled a society's __________ controlled that society.

Accepted Answer

plant and equipment ...

Question 18

Which statement most closely reflects the viewpoint of Karl Marx?

Accepted Answer

A)  Whoever controls a society's capital controls that society.
B)  By pursuing his own interest, a business owner frequently promotes that of the society more effectually than when he really intends to promote it.
C)  The capitalist, who has saved for years to buy his machinery and factory is entitled to all the profits he earns.
D)  The worker and the capitalist are both exploited by the government. A

Question 19

The famous phrase "the invisible hand" is associated with the economist ______________ ___________.

Accepted Answer

The answer of The famous phrase "the invisible hand" is...

Question 20

Adam Smith

Accepted Answer

A)  was a Scottish professor of philosophy.
B)  wrote The Wealth of Nations.
C)  said that the entrepreneur is motivated by self-interest.
D)  coined the term "the invisible hand," which means that the profit motive guides economic resources which effectively promotes the public interest.
E)  All of the statements about Adam Smith are true.

Exam 3: The Mixed Economy

If we were to examine the economic record of the former Soviet Union and China during the 1980s, we could reasonably conclude that

Correct AnswerverifiedShow Answer

In the former Soviet Union most of the farmland was in the form of ____________________.

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

Which of the following economic functions does the U.S. government perform?

Correct AnswerverifiedD

Statement I. The circular flow model oversimplifies the exchanges in our economy. Statement II. Most of the money received by households in the form of wages, rent, interest, and profits flows back to business firms in the form of consumer expenditures.

Correct AnswerverifiedC

Which one of the following is NOT a government failure?

Correct AnswerverifiedShow Answer

How many households receive their incomes mainly from the business sector?

Correct AnswerverifiedShow Answer

Which one of the following is not a mixed economy?

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Lack of the provision of public goods is considered a ______________ _____________.

Correct AnswerverifiedShow Answer

Adam Smith

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The government performs each of the following economic functions except

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Which of the following statements is true?

Correct AnswerverifiedShow Answer

If a nation starts out with very little capital

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Karl Marx believed that inevitably there would be a clash between ____________ and ____________, leading to an overthrow of capitalism.

Correct Answerverifiedcapitalist...View AnswerShow Answer

The Chinese economy was set back by

Correct AnswerverifiedShow Answer

Which statement is the most accurate?

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Karl Marx said that whoever controlled a society's __________ controlled that society.

Correct Answerverifiedplant and equipment ...View AnswerShow Answer

Which statement most closely reflects the viewpoint of Karl Marx?

Correct AnswerverifiedA

The famous phrase "the invisible hand" is associated with the economist ______________ ___________.

Correct AnswerverifiedShow Answer

Adam Smith

Correct AnswerverifiedShow Answer

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D

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C

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Lack of the provision of public goods is considered a __ _.

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Karl Marx believed that inevitably there would be a clash between and , leading to an overthrow of capitalism.

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capitalist...
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plant and equipment ...
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The famous phrase "the invisible hand" is associated with the economist ____ _.

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