Exam 2: The Market System and the Circular Flow

In the resource market:

In a market economy,the distribution of output will be determined primarily by:

The wants of consumers are expressed in the product market with "dollar votes."

The most efficient combination of resources in producing a given output is the combination that:

Continued losses in an industry will cause some firms to reduce output or eventually leave the industry.

Specialization in production is important primarily because it:

The market system's answer to the fundamental question "Who will get the goods and services?" is essentially:

Which of the following characteristics is least unique to a market system?

Enterprise managers and workers in the Soviet Union often resisted innovations in production methods because:

A market system tends to restrict business risk to owners and investors.This results in which of the following benefits?

Barter:

"Under central planning,some group has to decide how to get the necessary inputs produced in the right amounts and delivered to the right places at the right time.This is a nearly impossible task without markets and profits." This quotation best identifies the:

The French term "laissez-faire" means:

The advent of DVDs has virtually demolished the market for videocassettes.This is an example of:

Suppose that an individual sees a tremendous opportunity to produce and sell a new product but dismisses the idea because there is no way to exploit this opportunity for personal gain.This situation best identifies the:

The division of labor means that:

The competitive market system:

The simple circular flow model shows that:

Property rights are important because they:

If competitive industry Y is incurring substantial losses,output will: