Test 3 - MC Q PDF

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D) reallocation

of all resources from private to public uses

18) Which is a major feature of pure capitalism? A) reallocation of resources from private to public uses B) the right to own private property and control resource use C) price floors and price ceilings in markets D) central planning by government to provide goods and services

18) ______

19) By free enterprise, we mean that: A) individuals may obtain resources,

19) ______

organize production, and sell the resulting output

in any legal way they choose. free to those who can't afford to buy them. produce those products that government agencies determine can be produced profitably. D) individual producers determine how to produce, but government agencies determine what will be produced. B) products are provided C) individuals are free to

20) Which statement is correct? A) Producers are "kings" in

20) ______

21) Which is characteristic of the capitalistic ideology? A) free enterprise and choice B) government ownership of the means of production C) centralized decision-making D) unselfish individuals

21) ______

22) How do workers typically express self-interest? A) by seeking the highest price when purchasing a consumer product B) by seeking jobs with the best combination of wages and benefits C) by minimizing the economic losses of other business firms D) by maximizing the economic profits of other business firms

22) ______

23) Consumers express self-interest when they: A) collect economic profits. C) search for jobs with the highest wage

23) ______

a market economy because they determine what is produced. B) The market system is efficient at allocation of resources, but not consumer goods to their most valued uses. C) The operation of a market system eventually results in an equal distribution of income. D) Freedom of choice and enterprise are essential elements of the market system.

B) D)

seek the lowest price for the product. reduce business losses.

24) Competition means that: A) sellers can cause artificial product scarcities and thereby manipulate market price. B) there is only one seller in a market. C) a given product can be purchased at a number of different prices. D) there are large numbers of independently acting buyers and sellers in each market.

24) ______

25) The competitive market system: A) discourages innovation because it is

25) ______

difficult to acquire additional capital in the form of new machinery and equipment....