Questions and Answers
A(n) ______ system is a particular set of institutional arrangements and a coordinating mechanism that responds to the economizing problem.
economic
Which of the following describe the concept of laissez-faire?
Choose those characteristics that best describe a command system.
Which of the following is true of a market system?
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A ________ is an institution or mechanism that brings buyers and sellers into contact.
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Which of the following is the reason why every society needs to develop an economic system?
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The term 'laissez-faire' refers to
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Which characteristics define a command system?
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Private individuals and businesses are able to utilize property as they wish as a result of:
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Which of the following is characterized by the private ownership of resources and the use of markets to coordinate and direct economic activity?
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The most important consequence of property rights is that they ______.
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Which of the following represents an institution or mechanism that brings buyers and sellers into contact?
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________ property rights help to facilitate exchange in a free market system.
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Which of the following ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services?
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______ ownership of capital gives capitalism its name.
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In a _______ system, people act in their own self-interest.
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Geologists working for ExxonMobil have determined that there exists a high probability that your neighborhood is located above a potentially large oil reserve. What does this illustrate?
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The basis of competition is freedom of ______ exercised in the pursuit of ______.
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The title to an automobile or the deed to a cattle ranch assures a buyer that the seller is the legitimate owner of that property. This is an example of property rights _________.
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Competition among economic units ______.
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Which of the following does competition require?
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Freedom of _________ ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services.
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The interaction between buyers and sellers in a market system determines ______.
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When every economic unit in a society attempts to achieve its own particular goal, usually requiring delivering something of value to others, it is referred to as ______.
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In order to have competition in a market economy, there must be at least _____ or more sellers acting independently in a particular market.
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True or false: Competition...
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Study Notes
Economic Systems
- Economic systems involve institutional arrangements and mechanisms addressing the economizing problem.
- Market systems prioritize mutually beneficial transactions with limited government intervention.
Laissez-Faire Concept
- Laissez-faire emphasizes minimal government interference, allowing market forces to operate freely.
- Characterized by economic transactions based solely on mutual benefits.
Command System Characteristics
- Central planning boards dictate all economic decisions.
- Predominantly government ownership of property resources.
Market System Features
- Blends centralized government initiatives with decentralized firm actions.
- Describes a system where market forces drive economic coordination.
Market Definition
- A market connects buyers and sellers, facilitating exchanges.
Necessity of Economic Systems
- All societies require economic systems to address the economizing problem effectively.
Property Rights Importance
- Property rights promote cooperation and enable mutually satisfactory transactions.
- Private property rights significantly enhance exchanges in a free market system.
Freedom of Enterprise and Capital Ownership
- Entrepreneurs and businesses thrive under freedoms that allow resource use for producing chosen goods/services.
- Private ownership of capital is a defining characteristic of capitalism.
Self-Interest and Competition
- Market systems encourage individuals to act in their self-interest.
- Competition facilitates the diffusion of economic power among businesses and households.
Conditions for Competition
- Requires the presence of multiple independent buyers and sellers.
- Freedom for participants to enter or exit markets fosters a competitive environment.
Market Interaction
- Buyer-seller interactions determine product and resource pricing in a market system.
Self-Interest in Economy
- When economic units pursue their goals by delivering value, it is recognized as self-interest.
Summary on Competition
- To ensure competition, a minimum of two independent sellers must exist in the marketplace.
Studying That Suits You
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Description
Test your knowledge on key concepts from Chapter 2 regarding economic systems with these flashcards. The quiz covers terms like 'economic system' and principles such as laissez-faire. Perfect for students looking to reinforce their understanding of these important economic concepts.