Question

1. great variety of goods and services is characteristic of:

a. a market economy.
b. a traditional economy.
c. a command economy.
d. all economic systems.

1. capitalism is an economic system in which:

a. the factors of production are owned by private citizens.
b. government directs the use of resources.
c. decisions are based on tradition.
d. few risks are involved.

1. which of the following is not a characteristic of private property?

a. consumer sovereignty.
b. owners have the right to do anything they want with their property as long as their actions do not interfere with the rights of others.
c. provides an incentive to work and invest
d. sanctity of contract.

1. the profit motive:

a. leads to lower prices, better quality, and greater variety.
b. leads to better quality and higher prices.
c. leads to less efficiency.
d. should not be associated with capitalism.

1. the source of capital in a market economy is:

a. saving that frees resources for alternative use.
b. the same source used in a command economy.
c. the government.
d. unrelated to savings.

1. which of the following goals deals with \equal pay for equal work\?

a. economic freedom
b. economic efficiency
c. economic equity
d. economic security

1. economic growth is an important goal because:

a. more jobs, goods, and services will be needed in the future.
b. prices have stabilized.
c. the population is likely to decline.
d. more people are working than ever before.

1. the economic system of the united states:

a. is based primarily on free enterprise and capitalism.
b. is less complex than it was during the 1800s.
c. is subject to less government intervention than it was during the 1800s.
d. is a traditional economy.

Explanation:

1. In a market economy, competition leads to a great variety of goods and services.
2. Capitalism is defined by private - ownership of the factors of production.
3. Consumer sovereignty is not a characteristic of private property but rather a concept related to consumer power in the market.
4. The profit motive in a competitive market drives firms to offer lower prices, better quality, and greater variety to gain an edge.
5. Saving frees up resources for alternative use and is a source of capital in a market economy.
6. "Equal pay for equal work" is related to the goal of economic equity.
7. Economic growth is important because future demands for jobs, goods, and services are expected to increase.
8. The US economic system is primarily based on free - enterprise and capitalism.

Answer:

1. A. a market economy
2. A. the factors of production are owned by private citizens
3. A. Consumer sovereignty
4. A. leads to lower prices, better quality, and greater variety
5. A. saving that frees resources for alternative use
6. C. Economic Equity
7. A. more jobs, goods, and services will be needed in the future
8. A. is based primarily on free enterprise and capitalism