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A principal feature of a command economy is that:

a. production decisions are made by profit-maximizing firms.

b. there is a central planning board at the top, which transmits economic decisions down to the various producing and consuming units below.

c. consumers are allowed to determine what is produced based on their demand for goods and services.

d. regulatory agencies constrain the most egregious forms of market power in a market system allocation.

 

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Anne Gillian Duero
Anne Gillian DueroLv10
27 Oct 2020
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Related questions

1. The high economic growth from the Industrial Revolution was characterized by

a. new opportunities to settle empty areas, particularly North America.

b. rapid technological and scientific innovation.

c. the expansion of national governments in Europe and North America.

d. a rapid increase in the accumulation of human and physical capital.

e. none of the above.

2. Periods of economic growth and prosperity can often be explained by

a. political paradigm shifts.

b. technological innovation

c. movement of capital

d. both a and b

e. both b and c

3. Prior to the onset of economic reform in the late 1980s, the Soviet Union and

most Eastern European countries allocated resources primarily by means of

a. markets.

b. national economic plans.

c. neither a nor b.

d. both a and b.

4. A major theme in the 1980s in the governments of England and the U.S.was

a. the appropriate role of government in the economy.

b. the pressure for expanding trade with former socialist block countries.

c. repressing inflation.

d. increasing employment opportunities.

e. none of the above.

5. One example of the expansion of internationalism in the 1990s was the development of a trade agreement between Canada, Mexico, and the United States. This agreement is known as

a. the GATT (General Agreement on Tariffs and Trade).

b. the IMF (International Monetary Fund).

c. the NAFTA (North American Free Trade Agreement).

d. the CMEA (Council for Mutual Economic Assistance).

6. The contemporary Chinese economy is of interest because

a. it combines central planning with a multiparty democratic political system.

b. it combines the market with a multiparty democratic political system.

c. it combines the market with a single-party political system.

d. none of the above.

7. In the analysis of the planned socialist economic systems, the concept of economic reform is usually referred to as

a. the replacement of the plan by the market after the collapse of the planning system.

b. the attempt to improve the operation of the planned economy without a significant shift toward market arrangements.

c. the frequent attempt, in the planned socialist economic systems, to introduce the industrial policy.

d. none of the above.

8. The modern approach to defining economic systems

a. is based on the €isms€ of capitalism and socialism.

b. emphasizes resource allocation arrangements over incentive systems.

c. defines economic systems according to a number of characteristics.

d. recognizes that defining economic systems is impossible.

e. none of the above.

9. Which of the following is not a major attribute of an economic system (Based on the textbook)?

a. Organization of decision-making arrangements.

b. Mechanisms for providing information and coordination.

c. Economic policies.

d. The system's physical and human capital.

e. Both c and d are correct.

10. A planned economy is one in which

a. subunits are coordinated by directives formulated by a superior agency.

b. subunits are not induced by appropriate incentives to carry out plan directives.

c. market allocation is combined with planned allocation.

d. a ministerial system prevails.

e. none of the above.

11. Property ownership rights include

a. disposition and utilization.

b. disposition, utilization, and the right to use the products and services generated.

c. disposition, utilization, and team production.

d. disposition, utilization, and economic incentives.

e. none of the above.

12. Consumer sovereignty means that

a. central planning is absent.

b. consumers elect public officials.

c. consumers make the basic decisions on what is to be produced.

d. consumers are not affected by advertising.

e. none of the above.

13. Which of the following is not a characteristic of market socialism?

a. Centralized decision-making.

b. Market allocation.

c. State or collective ownership.

d. Combination of moral and economic incentives.

e. All are characteristic of market socialism.

14. Two factors generally believed to be important in the analysis of levels of decision-making are

a. incentives and ownership.

b. authority and information.

c. level of economic development and ideological focus.

d. all of the above.

e. none of the above

15. Moral incentives generally refer to

a. direct money payments made to participants.

b. supplements to direct money payments, such as bonuses.

c. rewards that do not give the recipient greater command over goods and services but rather serve to reward desirable behavior.

d. all of the above.

e. none of the above

16. Principals and agents are different people. An agent is a party

a. who has controlling authority in an organization.

b. who acts on behalf of a principal.

c. with equity rights in the organization.

d. a and b are correct.

e. none of the above.

17. According to the text, opportunistic behavior occurs when a lower-level unit of an organization can use its information advantage against the interests of its superiors. This form of behavior, it is argued, can take two forms:

a. indicative planning and directive planning.

b. planners' preferences and consumer sovereignty.

c. moral hazard and adverse selection.

d. a and b are correct.

e. none of the above.

18. According to the text, there are two extremes of organizational structure. These extremes are termed

a. planned or market

b. corporate or individual proprietorship.

c. association based or hierarchy based.

d. a and c are correct.

e. none of the above.

19. It is often assumed that individuals who participate in the organized activity do so within the constraints of bounded rationality. The concept of bounded rationality

means that

a. individuals may not in fact pursue self-interest.

b. individuals face a variety of limitations, for example, in the ability to process information.

c. agents will never pursue goals or objectives set by principals.

d. b and c are correct

e. none of the above.

20. Modern comparative economists would object to the definition of economic systems only in terms of property ownership arrangements, because

a. they recognize that ownership arrangements are not important.

b. there is some private ownership of property in every economic system.

c. ownership arrangements are only one aspect of the economic system.

d. resource allocation procedures are much more important than property ownership.

e. all of the above.

When an owner of a productive resource deploys that resource where he gets the highest price for it, he is not only deploying that resources where it will create greatest value of final output but is also maximizing his own welfare. The greed of the owner and the efficient allocation of productive resources are congruent in a capitalist economy.

Question 1:

The annual income that can be consumed without diminishing the total capital assets of a nation is

purchasing power parity income.
sustainable national income.
environmental capital stock.
per capita income.

Question 2:

Maintaining the rainforest is very important because

of its absorptive capacity for CO2 emissions.
of maintaining agricultural production of countries dependent on the rainforest such as Brazil.
ensuring a successful land reform policy.
encouraging rainforest settlement of the poor

Question 3:

Which of the following leads to an underallocation of resources to a specific economic activity?

External benefits
Marginal costs
External costs
Marginal benefits

Question 4:

The free-rider problem plagues public goods because

once public goods are produced it is not possible to exclude anyone from consuming these goods.
the public doesn't care about public goods.
public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society.
policymakers ignore opportunity costs in making decisions

Question 5:

Which of the following methods could be used to correct for external costs?

Require firms in the industry to install pollution control devices.
Impose a tax or an effluent fee on the offenders.
Have the offender clean up the pollution it caused.
All of the above would be appropriate.

Question 6:

To correct for a negative externality, a government might impose a uniform tax related only to the physical quantity of pollution if

the economic damages are zero.
the administrative costs are high.
the cost of ascertaining the actual economic costs are relatively small.
the economic damages associated with the pollution are different across different locations.

Question 7:

In order to internalize the externality due to pollution, the government should impose a tax based on

the size of the firm causing the pollution.
the physical amount of pollution.
the value of the pollution-causing business activity.
the economic damage associated with the pollution.

Question 8:

In a market for emission permits, firms that emit over their allowed limits

pay a price of these emissions.
are forced to shut down.
are taxed by the government for the amount of emissions.
receive a subsidy for the amount of emissions.

Question 9:

The 1997 Kyoto Protocol was signed by

more than three dozen nations.
all nations in the world.
only the United States and the European Union.
only nations in Asia.

Question 10:

The problem of overfishing in waters that are commonly owned can be solved by

subsidizing fishing.
establishing property rights for fishing in the waters.
the use of the Coase Theorem.
allowing the market to ration fish.

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