The market system is an economic system that:
Produces more consumer goods than capital goods
Laissez-faire capitalism limits the government’s economic functions to the following, except:
Establishing a legal environment to enforce contracts among individuals
One major element of the command system is:
Central planning conducted by the government
In a market system, self-interest is the motivating force that:
Coordinates and creates consistency in the operations of various parts of the economy
With specialization in a market economy, individual:
Producers consume little or none of the products they produce
Specialization is beneficial:
At the individual, regional, and even international levels
The use of money for exchange and trade:
Fosters more specialization in production
The market economy is regarded as “efficient” in that:
It directs resources towards products that the society wants most
In the circular flow diagram, households get their ability to pay for their consumption expenditures from the:
Incomes they earn for their resources
In a market system, the task of assessing and managing the business risk of a firm is taken on by the firm’s:
Entrepreneurs
When economists describe “a market,” they mean:
A system that allows buyers and sellers to interact with one another
When high-school and college graduates apply for jobs in the labor markets,
Job applicants are the “sellers” while employers are the “buyers”.
The market demand schedule or curve for a product shows the relationship between how much of the product buyers are willing and able to buy and the:
Product’s price
When economists speak of “demand” in a particular market, they refer to:
The whole demand curve or schedule
Other things being equal, the law of demand suggests that as:
The price of iPads decreases, the quantity demanded will increase
A higher price reduces the quantity demanded for a product because:
Individuals can afford less of the product and will switch to substitutes
