QUIZ--CHAPTER FOURTEEN: Choose the best answer.
6. The idea of the invisible hand was introduced by
a. Wassily Leontief.
b. Adam Smith.
c. Thomas Jefferson.
d. Mountifort Longfield.
e. John Maynard Keynes.
7. In a free market, economic activity is coordinated by
a. central planners.
b. prices.
c. costs.
d. economists.
e. input-output analysis aimed at production targets.
8. In a free-market economy, prices coordinate society’s decisions about
a. How to produce? and To whom?
b. What to produce? How? and For whom?
c. How? and To whom? but not How much?
d. How much? and To whom? but not How?
e. How to produce but not what to produce.
9. If a technological breakthrough reduces input quantities needed to produce some item,
a. cost of production will be increased.
b. the price of the product will rise.
c. the price of the product will fall.
d. quantity demanded of the product will fall.
e. the supply curve for the item will shift to the left causing the price to fall.
10. Under laissez faire, the allocation of scarce resources among the different industries
a. is possible only with government tax and subsidy policies.
b. is accomplished by the price system.
c. requires a considerable amount of central planning.
d. is the result of consumer planning.
e. is determined by economists.
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