Economy - Chapter 2 | Attempts: 311 - Quiz, Trivia & Questions

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Quizzes Created: 1 | Total Attempts: 311

Questions: 10 | Attempts: 311 | Updated: Mar 21, 2023

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A short quiz about Chapter 2 of Economics.

Questions and Answers

1.

What is the economic system?
- A.
  
  The method used by a society to produce and distribute goods and services.
- B.
  
  The method used by a society to produce and distribute air and water.
Correct Answer
A. The method used by a society to produce and distribute goods and services.

Explanation
The economic system refers to the method utilized by a society to produce and distribute goods and services. This includes the processes and structures in place that determine how resources are allocated, how production is organized, and how goods and services are exchanged among individuals and entities within the society. It encompasses various elements such as the type of ownership (private, public, or mixed), the role of markets or government intervention, and the distribution of wealth and income.

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2.

What are factor payments?
- A.
  
  The income people receive for supplying money in banana peels.
- B.
  
  The income people receive for supplying factors of production- land, labor, capital or entrepreneurship
Correct Answer
B. The income people receive for supplying factors of production- land, labor, capital or entrepreneurship

Explanation
Factor payments refer to the income that individuals receive in exchange for supplying the factors of production, which include land, labor, capital, and entrepreneurship. These payments are made to compensate individuals for their contribution to the production process. For example, individuals receive rent for providing land, wages for supplying labor, interest for lending capital, and profit for taking entrepreneurial risks. This answer accurately defines factor payments as the income received for supplying factors of production.

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3.

Define Patriotism.
- A.
  
  The love of ones country - the passion that inspires a person to serve his or her country
- B.
  
  The love of ones pet or child.
Correct Answer
A. The love of ones country - the passion that inspires a person to serve his or her country

Explanation
Patriotism is defined as the love and devotion towards one's country, which encompasses a strong sense of loyalty and dedication to its well-being. It involves a deep emotional connection and pride in one's nation, motivating individuals to actively contribute and serve their country in various ways. This can include participating in civic duties, defending the country's values and interests, and working towards its progress and prosperity. Patriotism is driven by a genuine desire to contribute positively to one's country and is often associated with a sense of national identity and belonging.

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4.

Relies on habit, custom, or ritual to deicide what to produce, how to produce it, and to whom to distribute it.
- A.
  
  Traditional Economy
- B.
  
  Extraordinary Economy.
Correct Answer
A. Traditional Economy

Explanation
A traditional economy relies on habit, custom, or ritual to determine its production, distribution, and consumption patterns. This means that the decisions on what to produce, how to produce it, and who gets to receive the goods and services are based on long-standing cultural practices and traditions. In such an economy, there is often little room for individual choice or innovation, as the focus is on maintaining the established customs and traditions. This type of economic system is typically found in rural or indigenous communities where traditional ways of life and cultural practices are highly valued.

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5.

Market Economy.
- A.
  
  Economic decisions are made by individuals and are based on exchange, or trade
- B.
  
  Level of economic prosperity
Correct Answer
A. Economic decisions are made by individuals and are based on exchange, or trade

Explanation
In a market economy, economic decisions are made by individuals rather than the government. This means that individuals have the freedom to decide what to produce, how to produce it, and for whom to produce. These decisions are based on exchange or trade, where individuals engage in buying and selling goods and services in order to satisfy their needs and wants. The level of economic prosperity in a market economy is determined by the overall efficiency and effectiveness of these individual economic decisions and the resulting exchange and trade activities.

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6.

The central government alone decides how to answer all three key economic questions.
- A.
  
  Horizontally Planned Economy
- B.
  
  Centrally Planned Economy
Correct Answer
B. Centrally Planned Economy

Explanation
In a centrally planned economy, the central government has complete control over the decision-making process regarding the three key economic questions: what to produce, how to produce, and for whom to produce. This means that the government determines what goods and services are produced, the methods of production, and who gets access to these goods and services. This system is characterized by a lack of individual economic freedom and a high degree of government intervention and regulation.

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7.

What is profit?
- A.
  
  Financial gain.
- B.
  
  Financial loss.
Correct Answer
A. Financial gain.

Explanation
Profit is defined as a financial gain. It refers to the positive difference between the total revenue generated from sales and the total expenses incurred in producing or providing goods or services. In other words, profit is the surplus amount that remains after deducting all costs and expenses from the revenue. It is an essential aspect of business success and indicates the profitability and financial health of a company. Therefore, the correct answer is financial gain.

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8.

The hope of reward of the fear of punishment that encourages a person to behave in a certain way.
- A.
  
  Incentive
- B.
  
  Self-interest
Correct Answer
A. Incentive

Explanation
The term "incentive" refers to a motivating factor that encourages someone to act or behave in a particular way. In this context, the hope of a reward or the fear of punishment can serve as incentives to influence someone's behavior. These incentives create a sense of motivation and drive individuals to act in a certain manner, as they anticipate the positive outcome or wish to avoid negative consequences.

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1
0
9.

The power of consumers to decide what gets produced
- A.
  
  Socialism
- B.
  
  Consumer sovereignty.
Correct Answer
B. Consumer sovereignty.

Explanation
Consumer sovereignty refers to the power and control that consumers have in determining what goods and services are produced in an economy. In a socialist system, the government typically has more control over production decisions, whereas in a system characterized by consumer sovereignty, consumers have the ultimate say in what is produced through their purchasing decisions. This means that producers are incentivized to cater to consumer preferences and demands, as they are the ones who ultimately determine the success or failure of a product or service.

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10.

Characterized by a centrally planned economy with all economic and political power resting in the hands of the central government
- A.
  
  Communism
- B.
  
  Socialism
Correct Answer
A. Communism

Explanation
Communism is characterized by a centrally planned economy where all economic and political power is concentrated in the hands of the central government. In a communist system, there is no private ownership of property or means of production, and the government controls and distributes resources equally among the population. This system aims to create a classless society where everyone has equal access to resources and opportunities. Socialism, on the other hand, also involves government control of the economy, but it allows for some degree of private ownership and individual initiative.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
May 03, 2011

Quiz Created by
Independentstudy

Economy - Chapter 2

What is the economic system?

What are factor payments?

Define Patriotism.

Relies on habit, custom, or ritual to deicide what to produce, how to produce it, and to whom to distribute it.

Market Economy.

The central government alone decides how to answer all three key economic questions.

What is profit?

The hope of reward of the fear of punishment that encourages a person to behave in a certain way.

The power of consumers to decide what gets produced

Characterized by a centrally planned economy with all economic and political power resting in the hands of the central government