A) government policies in setting wages and interest rates.
B) the quantity and prices of resources that they possess.
C) the amount of savings that they have accumulated.
D) how closely connected they are to government and business leaders.
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A) land and other natural resources should be privately owned, but capital should be publicly owned.
B) land and other natural resources should be publicly owned, but capital should be privately owned.
C) government should not interfere with the operation of the economy.
D) government action is absolutely necessary if the economy is to achieve full employment and full production.
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A) $15,000.
B) $18,000.
C) $3,000.
D) $12,000.
E) $27,000.
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A) there is easy entry into and exit out of industries.
B) a government-issued license is required to set up a firm in an industry.
C) the government purchases most goods and services.
D) economic power is concentrated among a few large firms.
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A) public ownership of all capital
B) central planning
C) minimal government intervention
D) a circular flow of goods, resources, and money
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A) "Through government-funded research programs."
B) "Through redistribution of income to promote greater equality."
C) "Through training and retraining programs."
D) "Through the profit potential that encourages development of new technology."
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A) Bobbie goes to work and builds cars; she uses the income she receives to buy food at the grocery store.
B) Evan buys a new couch; the owner of the furniture store uses some of the money from the sale to pay her supplier and uses the rest to take her family out to dinner.
C) Boeing experiences a surge in orders for new airplanes, prompting the company to hire more workers.
D) All of these answers illustrate the workings of the circular flow model.
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A) individuals are free to take on the financial risks involved in a business.
B) trades that take place in the economy are mutually agreeable transactions among individuals.
C) economic agents can act in their own self-interest.
D) large firms are allowed to coerce other firms and individuals.
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A) households are on the buying side of both product and resource markets.
B) businesses are on the selling side of both product and resource markets.
C) households are on the selling side of the resource market and on the buying side of the product market.
D) businesses are on the buying side of the product market and on the selling side of the resource market.
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A) entrepreneurs are free to obtain and use resources to produce goods and services.
B) consumers are free to buy goods and services that their budgets allow.
C) economic power is diffused by competition among economic units.
D) government is restricted to national defense and does not intervene at all in various markets.
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A) consumers at the losing end.
B) output that society wants.
C) unnecessary conflict and turmoil.
D) a need for government action.
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A) The total output of economic goods may be increased even without any increase in resources.
B) Scarce resources are utilized more efficiently by exploiting differences among them.
C) Specialization fosters learning by doing, thus lowering the unit-costs of products.
D) Firms and workers become less dependent on others for producing goods and services.
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A) no coincidence of wants exists between any two states.
B) a coincidence of wants exists between Michigan and Washington.
C) a coincidence of wants exists between Texas and Washington.
D) a coincidence of wants exists between Michigan and Texas.
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A) comes closest to using the same quantities of land, labor, capital, and entrepreneurial ability.
B) minimizes the cost per unit of output.
C) uses the smallest total quantity of all resources.
D) conserves most on the use of labor.
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A) goods and resources, respectively.
B) money incomes and output, respectively.
C) output and money incomes, respectively.
D) resources and goods, respectively.
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A) bring about a more equal distribution of income.
B) signal that resources should be reallocated.
C) eliminate small firms and reduce competition.
D) tell government which industries need to be subsidized.
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A) promote the equal distribution of real assets and wealth.
B) achieve full employment and price level stability.
C) contribute to a more equal distribution of income.
D) reallocate resources from less-desired to more-desired uses.
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A) wage, rent, interest, and profit income.
B) land, labor, capital, and entrepreneurial ability.
C) goods and services.
D) consumer expenditures.
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