Exam 2: B: The Market System and the Circular Flow

In the simple circular flow model:

In the factor market:

In a competitive market economy, firms and resource suppliers will seek to further their own self-interest, but at the same time, as if guided by an "invisible hand," they will promote the public interest.

Which statement is correct?

"Consumer sovereignty" refers to the:

The coordination problem in command economies became more difficult as:

If an increase occurs in the demand for product X, we would expect all of the following to occur except:

Economic efficiency would be primarily discussed in response to which of the fundamental questions about a competitive market economy?

The "invisible hand" concept suggests that:

The "invisible hand" refers to the:

Which of the following best describes the "invisible hand" concept?

Consider a barter situation where you have pens and you want pencils.To achieve your objective there must be a(n):

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

The market system is said to be characterized by "consumer sovereignty." This is because:

Money functions as a medium of exchange in permitting the ready comparison of the relative worth of heterogeneous products.

The private ownership of property resources and use of prices to direct and coordinate economic activity is characteristic of:

A purely competitive economy assumes the existence in each industry of a:

How do workers typically express self-interest?

Government alters the distribution of income by market intervention, in which case it modifies the prices established by market forces.

In a capitalistic economy: