Exam 2: The Market System and the Circular Flow

The term consumer sovereignty means that

The market system's answer to the fundamental question "How will the goods and services be produced?" is essentially

The highly influential book by Adam Smith, who brought up the "invisible hand" notion, is titled

A characteristic of centrally planned economies is that

The invisible hand promotes society's interests because

Laissez-faire capitalism limits the government's economic functions to the following, except

Which of the following is necessary to make a trade in a barter economy?

Broadly defined, competition involves

The following table illustrates alternative production techniques for producing 18 widgets that can be sold for $1 each for a total revenue of $18. Using technique A will result in an

Consumer sovereignty and "dollar votes" guide the market system in dealing with which fundamental economic question?

Capitalism gets its name from the fact that capital resources are mostly

The market system communicates changes in market conditions and elicits appropriate responses from businesses and resource suppliers through changes in prices. This is known as the

The invisible hand refers to the many indirect controls that the federal government imposes in a market system.

The market system

If people tried to produce most of what they need on their own, then this would lead to a more efficient use of the economy's resources.

In a competitive market economy, firms select the least-cost production technique because

Profits are the primary "success indicator" for firms in a centrally planned economy.

What advantage does a money economy have over a barter economy?

In the circular flow model of the market system, households' major role is to

Laissez-faire capitalism is characterized by