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Questions and Answers
A(n) ______ system is a particular set of institutional arrangements and a coordinating mechanism that responds to the economizing problem.
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?
Which of the following describe the concept of laissez-faire?
- A system where the government makes all economic decisions.
- A system with no market transactions.
- A market system in which only mutually beneficial economic transactions are completed. (correct)
- A market system in which the role of government is limited to protecting private property. (correct)
Choose those characteristics that best describe a command system.
Choose those characteristics that best describe a command system.
- Free market mechanisms.
- A central planning board makes all economic decisions concerning resources. (correct)
- The government owns most property resources. (correct)
- Decentralized decision-making by private enterprises.
Which of the following is true of a market system?
Which of the following is true of a market system?
A ________ is an institution or mechanism that brings buyers and sellers into contact.
A ________ is an institution or mechanism that brings buyers and sellers into contact.
Which of the following is the reason why every society needs to develop an economic system?
Which of the following is the reason why every society needs to develop an economic system?
The term 'laissez-faire' refers to
The term 'laissez-faire' refers to
Which characteristics define a command system?
Which characteristics define a command system?
Private individuals and businesses are able to utilize property as they wish as a result of:
Private individuals and businesses are able to utilize property as they wish as a result of:
Which of the following is characterized by the private ownership of resources and the use of markets to coordinate and direct economic activity?
Which of the following is characterized by the private ownership of resources and the use of markets to coordinate and direct economic activity?
The most important consequence of property rights is that they ______.
The most important consequence of property rights is that they ______.
Which of the following represents an institution or mechanism that brings buyers and sellers into contact?
Which of the following represents an institution or mechanism that brings buyers and sellers into contact?
________ property rights help to facilitate exchange in a free market system.
________ property rights help to facilitate exchange in a free market system.
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?
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?
______ ownership of capital gives capitalism its name.
______ ownership of capital gives capitalism its name.
In a _______ system, people act in their own self-interest.
In a _______ system, people act in their own self-interest.
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?
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?
The basis of competition is freedom of ______ exercised in the pursuit of ______.
The basis of competition is freedom of ______ exercised in the pursuit of ______.
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 _________.
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 _________.
Competition among economic units ______.
Competition among economic units ______.
Which of the following does competition require?
Which of the following does competition require?
Freedom of _________ ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services.
Freedom of _________ ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services.
The interaction between buyers and sellers in a market system determines ______.
The interaction between buyers and sellers in a market system determines ______.
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 ______.
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 ______.
In order to have competition in a market economy, there must be at least _____ or more sellers acting independently in a particular market.
In order to have competition in a market economy, there must be at least _____ or more sellers acting independently in a particular market.
True or false: Competition...
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.
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