Microeconomics Canadian 14th Edition Mcconnell - Test Bank

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) The command system is also known as: 1)

A) market socialism. C) pure capitalism. B) the market system.

D) socialism or communism.

Answer: D

2) The economy of the former Soviet Union was best described as: A) mixed capitalism. B) a command economy.

C) authoritarian capitalism. D) market socialism.

Answer: B

2)

3) The economy of North Korea most closely approximates: A) pure capitalism C) market socialism Answer: D

3)

B) authoritarian capitalism

D) a command economy

4) Today, China's economy most closely approximates: A) authoritarian capitalism C) pure capitalism Answer: B

4)

B) market socialism

D) a command economy

5) Which would not be characteristic of a capitalist economy? A) government ownership of the means of production

B) free enterprise and choice

C) competition and unrestricted markets

D) reliance on the market system

Answer: A

5)

6) Which of the following statements best describes a mixed economy? A) In a mixed economy, the role of individual self-interest is relatively unimportant

because government makes most of the economic decisions.

B) In a mixed economy, government policies determine the production and the

allocation of goods and services, but each individual is free to pursue his or her own

self-interest.

C) In a mixed economy, the government and private sectors interact in determining

production and allocation of goods and services.

D) In a mixed economy, society determines production and the allocation of goods and

services only through the market system.

Answer: C

6)

17) The private ownership of property resources and use of prices to direct and coordinate

economic activity is characteristic of:

A) a market system. C) communism. B) socialism.

D) a command system.

Answer: A

7)

8) In a capitalistic economy: A) consumers can never be sovereign.

B) there is a reliance on the market system.

C) the government owns the means of production.

D) markets can never be competitive.

Answer: B

9) The term "laissez faire" suggests that: A) government action is necessary if the economy is to achieve full employment and

full production.

B) land and other natural resources should be publicly owned, but capital equipment

should be privately owned.

C) government should not interfere with the operation of the economy.

D) land and other natural resources should be privately owned, but capital should be

publicly owned.

Answer: C

10) The term "mixed economy" refers to an economy: A) comprised of both extensive private markets and government involvement in the

economy.

B) which functions primarily on the basis of custom and tradition.

C) comprised of both product and resource markets.

D) which engages in both domestic and international trade.

Answer: A

11) The Canadian economy most closely approximates: A) a command economy C) mixed capitalism Answer: C

B) authoritarian capitalism

D) market socialism

12) Which of the following is unique to a market economy system? A) the extensive use of capital goods

B) private ownership of property resources

C) the use of money

D) specializatio