Deck 34: Globalization and Protectionism

Question 1

In the late 1800s and early 1900s, socialist thinking was rooted in the works of:

A) Karl Marx.
B) Adam Smith.
C) David Ricardo.
D) Thomas Malthus.

Answer 1

Karl Marx.

Question 2

According to Marxian theory, if the production of commodity X requires 20 percent more labor time than the production of commodity Y, then the value of commodity X will be:

A) about equal to the value of commodity Y.
B) exactly 20 percent more than the value of commodity Y.
C) exactly 20 percent less than the value of commodity Y.
D) over 20 percent more than the value of commodity Y.

Answer 2

exactly 20 percent more than the value of commodity Y.

Question 3

According to Marx, surplus value is produced by:

A) skilled workers only.
B) unskilled workers only.
C) all workers.
D) capitalists.

Answer 3

all workers.

Question 4

According to Karl Marx, the payment just high enough to enable the working population to sustain itself is:

A) interest.
B) surplus value.
C) economic profit.
D) the subsistence wage.

Question 5

Das Kapital was written by:

A) Thomas Malthus.
B) Karl Marx.
C) Adam Smith.
D) David Ricardo.

Question 6

The theory that holds that the relative values of goods and services are ultimately determined by the quantities of labor required in their production is the:

A) capitalism theory.
B) labor theory of value.
C) marginal productivity theory.
D) theory of surplus value.

Question 7

Which of the following statements is true?

A) Marx did not follow a historical approach to economics.
B) To Marx, capitalism was a stage in the development of economic systems.
C) Marx explained how capitalism would give way to feudalism.
D) Marx was the lone economist in his time who supported the labor theory of value.

Question 8

The labor theory of value holds that the value of goods ultimately depends on the:

A) demand and supply of labor translated into prices.
B) relative amount of labor used in their production.
C) monopoly prices set for them by monopolists.
D) labor being used in the market place, but value must also be a result of the interaction of demand and supply in the long run.

Question 9

The Communist Manifesto was written by:

A) Karl Marx and Friedrich Engels.
B) David Ricardo and Thomas Malthus.
C) John Stuart Mill and Alfred Marshall
D) Vladimir Lenin and Joseph Stalin

Question 10

The history of socialism dates back to:

A) Vladimir Lenin, in the early 1900s.
B) Karl Marx, in the mid-1800s.
C) Robert Owen, in the 1600s.
D) biblical times.

Question 11

Karl Marx's argument that the value of any commodity is determined by the amount of labor time used in its production is the essence of:

A) the labor theory of value.
B) his perspective on the class struggle between industrial workers and craftsmen.
C) the economic interpretation of history.
D) his theory that surplus value and capital accumulation are irrelevant.

Question 12

According to Karl Marx:

A) the surplus value that belongs to workers is appropriated by capitalists.
B) political forces are the prime cause of fundamental historical change.
C) the bourgeoisie will eventually rise and overthrow the capitalistic system.
D) the value of any commodity is determined by the opportunity costs of all factors of production.

Question 13

The essence of Karl Marx's theory of value is that:

A) the proletariat will eventually rise and overthrow the capitalistic system.
B) the value of any commodity is determined by the amount of labor time used in its production.
C) all great political, social, intellectual, and ethical changes are based on the organization of economic systems.
D) the surplus value that belongs to capitalists is stolen by workers in order to expand and perpetuate the capitalistic system.

Question 14

Adam Smith argued in the Wealth of Nations that the relative values of different goods was determined by:

A) demand and supply.
B) the invisible hand.
C) the relative amounts of labor used in their production.
D) the relative amounts of profit.

Question 15

Socialism, as an organizing principle for national economies, dates from:

A) Joseph Stalin, in the early 1900s.
B) Karl Marx, in the mid-1800s.
C) Charles Fourier, in the 1600s.
D) biblical times.

Question 16

According to Karl Marx:

A) the surplus value that belongs to capitalists is stolen by workers.
B) political forces are the prime cause of fundamental historical change.
C) entrepreneurs will eventually rise and overthrow the capitalistic system.
D) the value of any commodity is determined by the amount of labor time used in its production.

Question 17

Marx called the difference between the price of a good or service and its labor cost its:

A) profit.
B) surplus value.
C) excess price.
D) subsistence wage.

Question 18

Karl Marx predicted the overthrow of the capitalistic system and its replacement by a _______ system.

A) socialist
B) feudalist
C) democratic
D) hedonist

Question 19

Socialism, as an organizing principle for a national economy, is in large part the product of the ideas of:

A) Adam Smith.
B) Karl Marx.
C) David Ricardo.
D) Thomas Malthus.

Question 20

According to Marx, the value of a commodity is determined:

A) exclusively by the labor required to produce it.
B) exclusively by capitalists.
C) exclusively by its demand.
D) by both labor and demand.

Question 21

According to Marx, surplus value is:

A) taken away from workers by capitalists.
B) taken away from capitalists by workers.
C) used by workers to invest in capital.
D) used by capitalists to provide fringe benefits to workers.

Question 22

Marx predicted that:

A) profit rates would rise.
B) wage rates would rise.
C) labor's share of total income in market economies would fall.
D) business cycles would become more stable.

Question 23

According to Marx, if the wage increased above the subsistence

A) workers would spend it lavishly.
B) capitalists would refuse to pay the higher wage.
C) the increase in the number of workers would drive the wage back down.
D) surplus value would rise.

Question 24

Karl Marx examined a _______ process that he argued would ultimately result in the _______ of capitalism.

A) static, stagnation
B) dynamic; collapse
C) dynamic; stagnation
D) historical; a peaceful elimination

Question 25

Which of the following describes the Communist Manifesto?

A) It contains a call for action.
B) It was written less than 150 years ago.
C) It is Karl Marx's detailed theoretical analysis of market capitalism.
D) It was written solely by Karl Marx.

Question 26

According to Karl Marx, the subsistence wage is the:

A) marginal cost of production under socialism.
B) marginal cost of production under capitalism.
C) payment just high enough to enable the working population to sustain itself.
D) accounting profit of the bourgeoisie that enables the replacement of socialism with communism.

Question 27

According to Karl Marx, capital accumulation is possible through:

A) saving.
B) interest.
C) surplus value.
D) entrepreneurship.

Question 28

Marx felt that profit:

A) was morally justified.
B) represented exploitation of workers by capitalists.
C) would increase to enormous rates, when a revolution would finally take place and capitalism would be destroyed.
D) represented a surplus of labor that acted to push wages down.

Question 29

According to Marx, surplus value is the source of:

A) production costs.
B) capitalists' profits.
C) the subsistence wage.
D) a commodity's price.

Question 30

Marx predicted that:

A) profit rates would fall.
B) wage rates would rise.
C) labor's share of total income in market economies would rise.
D) business cycles would become more stable.

Question 31

The price of a good, according to Marx, equaled the sum of _______ and the _______ resulting from production of the good.

A) capital costs; profits
B) a return to labor; surplus value
C) prices of factors; surplus value
D) intermediate prices; costs

Question 32

According to Karl Marx, if workers produce $20 worth of goods and are paid $13 in subsistence wages, then surplus value is:

A) $7.
B) $13.
C) $20.
D) $33.

Question 33

According to Karl Marx, surplus value makes it possible to have:

A) proletariat savings.
B) capital accumulation.
C) unregulated markets.
D) subsistence wages.

Question 34

Marx predicted that:

A) profit rates would rise.
B) wage rates would tend toward subsistence.
C) labor's share of total income in market economies would rise.
D) business cycles would become more stable.

Question 35

According to the text, Marx's conclusions stemmed from his _______ and his perception of the role of _______ in capitalism.

A) theory of sociology; technology
B) labor theory of value; profit
C) labor theory of value; technology
D) perception of the class struggle; government

Question 36

Marx held that, ultimately, the price of a good or service:

A) equaled a return to labor plus a profit:
B) was determined by the intersection of demand and supply.
C) was determined by the competing interests in the marketplace.
D) equaled wages minus surplus value.

Question 37

The theoretical exposition of Karl Marx examined an economy that would be described in today's terms as:

A) monopolistic competition.
B) perfect competition.
C) oligopoly.
D) monopoly.

Question 38

Karl Marx would most likely agree with the statement that:

A) class struggle is a recent phenomenon.
B) labor and management are naturally inclined to cooperate.
C) capitalism will eventually be replaced with socialism.
D) labor is only one factor contributing to the value of a product.

Question 39

The cost of capital, according to Marx, was:

A) determined by the amount of labor involved in the production of the capital.
B) determined in the competitive market.
C) set according to the desires of the capitalists.
D) the sum of all factor costs involved in the production of the capital.

Question 40

Marx predicted that:

A) profit rates would rise.
B) wage rates would rise.
C) labor's share of total income in market economies would rise.
D) business cycles would become more unstable.

Question 41

Socialism in Yugoslavia was characterized by:

A) private ownership of all factories.
B) low living standards compared to the Soviet Union.
C) more equal income distributions than market capitalist economies.
D) low unemployment rates.

Question 42

Immediately after the Russian Revolution in 1917, the Soviet Union:

A) put into place the detailed Marxian blueprint for replacing capitalism with socialism.
B) was faced with a severe problem of what to do now that they were in control.
C) instituted a program called "war communism," which resulted in a peaceful and prosperous period from 1918-1921.
D) had to resort to the market system until 1921, when they began socialism in earnest.

Question 43

Which of the following statements is false?

A) Decisions about what to produce in the former Soviet Union were made primarily by political leaders.
B) Soviet planners consistently set prices that were too high, and this led to severe shortages.
C) Soviet plant managers lacked incentives to adopt new technologies.
D) Soviet plant managers lacked incentives to cut costs.

Question 44

The Communist Manifesto predicted the:

A) breakup of the Soviet Union.
B) globalization of capitalism.
C) division of society into numerous hostile camps.
D) fall of communism.

Question 45

From 1921-1924, the Soviet Union experienced a period called:

A) war communism.
B) the New Economic Policy.
C) Lenin's communism period.
D) the Reds and the Whites.

Question 46

The New Economic Policy in the Soviet Union was developed in 1921 by:

A) Karl Marx.
B) Vladimir Lenin.
C) Joseph Stalin.
D) Marshal Tito.

Question 47

Socialism in Yugoslavia was characterized by:

A) private ownership of all factories.
B) high living standards compared to the Soviet Union.
C) less equal income distributions than market capitalist economies.
D) low unemployment rates.

Question 48

Market socialism was established in Yugoslavia by:

A) Karl Marx.
B) Vladimir Lenin.
C) Joseph Stalin.
D) Marshal Tito.

Question 49

In the former Soviet Union, the quantities of output and prices to be charged by key firms were determined by:

A) the firms.
B) Gosbank.
C) Gosplan.
D) demand and supply.

Question 50

The Communist Manifesto concludes with the sentence:

A) "A specter is haunting Europe - the specter of communism."
B) "The history of all hitherto existing societies is the history of class struggles."
C) "What the bourgeoisie, therefore, produces, above all, is its own gravediggers."
D) "Working men of all countries, unite!"

Question 51

In the Soviet Union from 1918-1921, the period known as _______ , the country experienced _______ .

A) New Economic Policy; a successful period of economic transition
B) war communism; a period of tremendous devastation
C) Lenin's Will; political failure, but started successfully down the planning road to communism
D) Stalin's Way; absolute despotism

Question 52

Socialism in Yugoslavia was characterized by:

A) private ownership of all factories.
B) low living standards compared to the Soviet Union.
C) less equal income distributions than market capitalist economies.
D) high unemployment rates.

Question 53

Socialism in Yugoslavia was characterized by:

A) public ownership of factories with five or more employees.
B) low living standards compared to the Soviet Union.
C) less equal income distributions than market capitalist economies.
D) low unemployment rates.

Question 54

A period in the early years of the Soviet Union from 1921-1924 was called _______, which was essentially _______

A) the New Economic Policy; the beginning of socialist planning
B) Lenin's last years; the beginning of socialist planning
C) the early communist period; an interim period of a continuation of the market system
D) the New Economic Policy; a partial reinstitution of the market as an allocative mechanism

Question 55

Managers of state-owned firms in the former Soviet Union were rewarded by:

A) huge profits.
B) a system of rewards based on the meeting of quotas established for the firms.
C) a scheme that provided incentives to reduce costs.
D) a scheme that provided incentives to introduce new technologies.

Question 56

The central planning agency of the Soviet Union was the:

A) KGB.
B) Bao Gan Dao Hu.
C) Manifesto.
D) Gosplan.

Question 57

On the eve of the collapse of the Soviet Union, Soviet economists estimated that per capita consumption in the Soviet Union was as low as one _______ of the U.S. level.

A) sixth
B) tenth
C) fifteenth
D) twentieth

Question 58

The former Soviet Union was characterized by all of the following EXCEPT:

A) outdated technologies.
B) prices that were set too low.
C) persistent shortages.
D) persistent surpluses.

Question 59

Socialism under Stalin was an economic system characterized by _______ ownership of the factors of production and allocative decisions made _______ .

A) private; through markets
B) private; by the government
C) government; through markets
D) government; by the government

Question 60

Decisions in the former Soviet Union led to inefficiency, because:

A) planners incorporated consumer preferences into their decisions.
B) planners did not incorporate costs of all the factors of production in their decisions.
C) the market was not completely abandoned.
D) the market was overutilized.

Question 61

An evaluation of centrally planned economies reveals that they:

A) put a premium on technological innovation.
B) achieved a nearly equal distribution of income.
C) were unsuccessful in attaining economic efficiency.
D) experienced lower rates of employment than most capitalist countries.

Question 62

An evaluation of centrally planned economies reveals that they:

A) put a premium on technological innovation.
B) achieved a nearly equal distribution of income.
C) were successful in attaining economic efficiency.
D) experienced production rigidities and shortages.

Question 63

In the evaluation of centrally planned economies, it is evident that they:

A) placed a high priority on technology and innovation.
B) achieved an equal distribution of income.
C) experienced shortages and production rigidities.
D) were efficient.

Question 64

China's transition to market capitalism has been characterized by:

A) rapid change.
B) free market exchanges for all production.
C) rapid economic growth.
D) increasingly centralized decisionmaking.

Question 65

The Case in Point on socialist cartoons suggests that Soviet citizens recognized that:

A) inefficiency resulted because of failure to take in costs of production.
B) it was difficult for businesses to incorporate new technologies in a command economy.
C) their system of a command economy failed to respond to consumers' demands.
D) all of the above

Question 66

China's transition to market capitalism has been characterized by:

A) gradual change.
B) free market exchanges for all production.
C) very slow economic growth.
D) increasingly centralized decisionmaking.

Question 67

Following the collapse of the command socialist system in 1991, prices in Russia:

A) increased by as much as 10-fold in 6 months.
B) shot up because banks made too many loans and increased the money supply too much.
C) increased rapidly during the transition because price floors had been set too low; once price liberalization began, they subsequently rose very rapidly.
D) fell as fear of the future led Russian consumers to reduce their consumption.

Question 68

China's transition to market capitalism has been characterized by:

A) three tiers to its economic system.
B) free market exchanges for all production.
C) very slow economic growth.
D) increasingly decentralized decisionmaking.

Question 69

China's system of contracting all decisions to households is called:

A) bao gan dao hu.
B) mao zedong.
C) zhao ziyang.
D) li bao.

Question 70

The problems encountered by transitional economies trying to become well-functioning market economies involve:

A) eliminating bank checking accounts in favor of paper currency.
B) taking steps to raise the inflation rate.
C) expanding private property rights.
D) eliminating all welfare programs and social safety nets.

Question 71

Between 1980 and 2011, China's per capita output:

A) increased moderately.
B) increased by about 30 percent.
C) more than doubled.
D) more than quadrupled.

Question 72

China's Great Leap Forward was considered to be:

A) an unqualified success.
B) good for small farmers.
C) good for consumers, but not as good for producers.
D) an economic disaster.

Question 73

The problems encountered by transitional economies trying to become well-functioning market economies involve:

A) introducing bank checking accounts.
B) taking steps to raise the inflation rate.
C) reducing private property rights.
D) eliminating all welfare programs and social safety nets.

Question 74

Communism was established in China in 1949 by:

A) Vladimir Lenin.
B) Joseph Stalin.
C) Marshal Tito.
D) Mao Zedong.

Question 75

The Yugoslav economy under Tito was characterized by:

A) persistent unemployment.
B) low inflation.
C) decreasing disparities in income levels between regions.
D) living standards that were quite low in comparison to other Soviet bloc countries.

Question 76

Central planning proved to be a failure in communist countries in part because of:

A) abundant market information.
B) unquestioned reliance on the price system.
C) insufficient use of government ownership.
D) inadequate rewards for innovation.

Question 77

The problems encountered by transitional economies trying to become well-functioning market economies involve:

A) taking steps to raise the inflation rate.
B) reducing private property rights.
C) eliminating all welfare programs and social safety nets.
D) changing public perception that capitalism is evil.

Question 78

The problems encountered by transitional economies trying to become well-functioning market economies involve:

A) eliminating bank checking accounts in favor of paper currency.
B) taking steps to reduce the inflation rate.
C) reducing private property rights.
D) eliminating all welfare programs and social safety nets.

Question 79

China's transition to market capitalism has been characterized by:

A) two tiers to its economic system.
B) free market exchanges for all production.
C) very slow economic growth.
D) increasingly centralized decisionmaking.

Question 80

China's economic system in the 1950s was patterned after the economic system of:

A) the United States.
B) Yugoslavia.
C) the Soviet Union.
D) Cuba.