Question 1

The Canadian economy most closely approximates:

Accepted Answer

A)   mixed capitalism
B)   a command economy
C)   market socialism
D)   authoritarian capitalismE) A) and D)
F) B) and C)

Question 2

Specialization in production is important primarily because it:

Accepted Answer

A)   results in greater total output.
B)   allows society to avoid the coincidence-of-wants problem.
C)   allows society to trade by barter.
D)   allows society to have fewer capital goods.E) B) and C)
F) A) and D)

Question 3

The market system is said to be characterized by "consumer sovereignty." This is because:

Accepted Answer

A)   a large number of consumer goods are produced.
B)   the prices of consumer goods are regulated by government.
C)   consumer goods are more profitable than investment goods.
D)   of the role of consumers in determining what goods are produced.E) None of the above
F) B) and C)

Question 4

-On the basis of the information provided and assuming trade occurs between the three provinces we can expect:

Accepted Answer

A)   Alberta to exchange apples with Ontario and receive money in return.
B)   Alberta to exchange apples with British Columbia and receive money in return.
C)   Ontario to exchange lettuce with British Columbia and receive autos in return.
D)   none of the above to occur.E) None of the above
F) C) and D)

Question 5

An increase in demand for strawberries is most likely to:

Accepted Answer

A)   increase the demand for strawberry pickers.
B)   reduce the supply of strawberry pickers.
C)   reduce the supply of strawberries.
D)   reduce the demand for strawberry pickers.E) A) and B)
F) All of the above

Question 6

While in market economies the profit depends on consumer demand,production production efficiency,and product quality,for command economies profit depends on:

Accepted Answer

A)   production cost.
B)   product differentiation.
C)   product mix.
D)   quantitative production target.E) A) and D)
F) A) and B)

Question 7

Which of the following best describes the "guiding function" of competitive prices?

Accepted Answer

A)   Profitable industries tend to contract and unprofitable industries tend to expand.
B)   The market system will always generate economic profits for firms which use the least costly production technology.
C)   The market system can negotiate reallocations of resources which are appropriate to changes in consumer tastes,technology,and resource supplies.
D)   When prices are in equilibrium,product shortages or surpluses cannot occur.E) None of the above
F) A) and D)

Question 8

-Refer to the figure.If box B represents the factor market and flow (3) represents money income,then:

Accepted Answer

A)   box A is the product market and box C is households.
B)   box C is the product market and box A is households.
C)   box D is the product market and box C is households.
D)   box C is the product market and box D is households.E) C) and D)
F) B) and C)

Question 9

Specialization may be conducive to an expansion of total output even though the individuals involved may have identical abilities.

Accepted Answer

A) True 
 B)False

Question 10

Which fundamental question about a competitive market system primarily focuses on the cost of producing the good and services?

Accepted Answer

A)   What will be produced?
B)   How will the goods and services be produced?
C)   How will the system accommodate change?
D)   Who is to receive the output?E) A) and C)
F) B) and D)

Question 11

The development of new technology and capital goods are essential elements for the market system.This is because:

Accepted Answer

A)   using more efficient production processes means more output for the economy.
B)   more capital goods means less future consumption goods.
C)   the standard of living and development of new technology are inversely related.
D)   the most direct methods of production are more efficient.E) A) and B)
F) A) and C)

Question 12

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

Accepted Answer

A)   the guiding function of prices.
B)   capital accumulation.
C)   the "invisible hand."
D)   dollar votes.E) B) and D)
F) None of the above

Exam 2: The Market System and the Circular Flow

Specialization in production is important primarily because it:

Correct Answer
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The market system is said to be characterized by "consumer sovereignty." This is because:

Correct Answer
verified

-On the basis of the information provided and assuming trade occurs between the three provinces we can expect:

Correct Answer
verified

The Canadian economy most closely approximates:

Correct Answer
verified

Which of the following best describes the "guiding function" of competitive prices?

Correct Answer
verified

Specialization may be conducive to an expansion of total output even though the individuals involved may have identical abilities.

Correct Answer
verified

The development of new technology and capital goods are essential elements for the market system.This is because:

Correct Answer
verified

-Refer to the figure.If box B represents the factor market and flow (3) represents money income,then:

Correct Answer
verified

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

Correct Answer
verified

While in market economies the profit depends on consumer demand,production production efficiency,and product quality,for command economies profit depends on:

Correct Answer
verified

An increase in demand for strawberries is most likely to:

Correct Answer
verified

Which fundamental question about a competitive market system primarily focuses on the cost of producing the good and services?

Correct Answer
verified

Exam 2: The Market System and the Circular Flow

Specialization in production is important primarily because it:

Correct AnswerverifiedShow Answer

The market system is said to be characterized by "consumer sovereignty." This is because:

Correct AnswerverifiedShow Answer

-On the basis of the information provided and assuming trade occurs between the three provinces we can expect:

Correct AnswerverifiedShow Answer

The Canadian economy most closely approximates:

Correct AnswerverifiedShow Answer

Which of the following best describes the "guiding function" of competitive prices?

Correct AnswerverifiedShow Answer

Specialization may be conducive to an expansion of total output even though the individuals involved may have identical abilities.

Correct AnswerverifiedShow Answer

The development of new technology and capital goods are essential elements for the market system.This is because:

Correct AnswerverifiedShow Answer

-Refer to the figure.If box B represents the factor market and flow (3) represents money income,then:

Correct AnswerverifiedShow Answer

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

Correct AnswerverifiedShow Answer

While in market economies the profit depends on consumer demand,production production efficiency,and product quality,for command economies profit depends on:

Correct AnswerverifiedShow Answer

An increase in demand for strawberries is most likely to:

Correct AnswerverifiedShow Answer

Which fundamental question about a competitive market system primarily focuses on the cost of producing the good and services?

Correct AnswerverifiedShow Answer

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