The two general types of economic systems that exist today are?
market systems and command systems.
Examples of command economies are?
Cuba and North Korea.
Of the following countries, the one that best exhibits the characteristics of a market economy is?
applies to all economies
Which of the following is a fundamental characteristic of the market system?
Broadly defined, competition involves?
independently acting buyers and sellers and freedom to enter or leave markets.
Which of the following is not an economic cost?
In a market economy the distribution of output will be determined primarily by?
the quantities and prices of the resources that households supply.
The market system's answer to the fundamental question "What will be produced?" is essentially?
"Goods and services that are profitable."
The market system's answer to the fundamental question "Who will get the goods and services?" is essentially?
"Those willing and able to pay for them."
The advent of DVDs threatens to eventually demolish the market for videocassettes. This is an example of?
"Under central planning, some group has to decide how to get the necessary inputs produced in the right amounts and delivered to the right places at the right time. This is a nearly impossible task without markets and profits." This quotation best identifies the?
coordination problem under central planning.
Innovation lagged in the centrally planned economies because?
enterprises resisted innovation in fear that their production targets would be raised.
The failure of Soviet central planning was reflected in?
a declining growth rate, poor quality goods, & the failure to provide promised consumer goods.
The simple circular flow model shows that?
households are on the selling side of the resource market and on the buying side of the product market.
The two basic markets shown by the simple circular flow model are?
product and resource.
Refer to the above diagram. Flow (1) represents? (see notes for chart)
wage, rent, interest, and profit income.
Refer to the above diagram. Flow (3) represents? (see notes for chart)
goods and services.
Refer to the above diagram. Flow (4) represents? (see notes for chart)
In terms of the circular flow diagram, businesses obtain revenue through the _____ market and make expenditures in the _____ market.
Households and businesses are?
sellers in the resource and product markets respectively.
Refer to the above diagram. Arrows (1) and (2) represent?
resources and goods respectively.
Refer to the above diagram. Arrows (3) and (4) represent?
incomes and consumer expenditures respectively.
Refer to the above diagram. Arrows (1) and (3) are associated with?
the resource market.
According to Dallas Federal Reserve economist W. Michael Cox, taken to its extreme, the logic of "buying American" implies that?
people should only consume what they can produce themselves.