Macro Economics: Chapter 2

3 October 2022
4.7 (114 reviews)
18 test answers

Unlock all answers in this set

Unlock answers (14)
question
The "coincidence of wants" problem associated with barter refers to the fact that:
answer
for exchange to occur, each seller must have a product that some buyer wants.
question
Which of the following is not one of the five fundamental questions? A) What prices will be charged for goods and services? B) How will the system promote progress? C) Who will get the goods and services? D) What goods and services will be produced?
answer
What goods and services will be produced?
question
Which of the following is a distinguishing feature of laissez-faire capitalism? A) Minimal government intervention. B) Public ownership of all capital. C) Central planning. D) A circular flow of goods, resources, and money.
answer
Minimal government intervention.
question
Which of the following is a distinguishing feature of a command system?
answer
Central planning.
question
The market system's answer to the fundamental question "Who will get the goods and services?" is essentially:
answer
"Those willing and able to pay for them."
question
Command systems are also known as:
answer
communism
question
From society's point of view, the economic function of profits and losses is to:
answer
reallocate resources from less desired to more desired uses.
question
The French term "laissez-faire" means:
answer
"let it be."
question
Which of the following is not a typical characteristic of a market system? A) Competition in product and resource markets. B) Freedom of enterprise. C) Private property. D) Government ownership of most property resources.
answer
Government ownership of most property resources.
question
The advent of DVDs has virtually demolished the market for videocassettes. This is an example of:
answer
creative destruction.
question
The use of money contributes to economic efficiency because:
answer
it promotes specialization by overcoming the problems with barter(trade)
question
The regulatory mechanism of the market system is:
answer
competition
question
The most efficient combination of resources in producing a given output is the combination that:
answer
minimize the cost per unit of output.
question
The dollar votes of consumers ultimately determine the composition of output and the allocation of resources in a market economy. This statement best describes the concept of:
answer
consumer sovereignty.
question
In what type of business do the owners bear no personal financial responsibility for the company's debts and obligations?
answer
Corporations.
question
Barter:
answer
entails the exchange of goods for goods.
question
The market system's answer to the fundamental question "How will the system accommodate change?" is essentially:
answer
"Through the guiding function of prices and the incentive function of profits."
question
"Consumer sovereignty" refers to the:
answer
idea that the decisions of producers must ultimately conform to consumer demands.