Market and socialist economies can be contrasted in all the following ways except that:
A. under a market economy government plays no role in the market; under socialism, government planning boards make most major economic decisions.
B. under a market economy labor is allocated by individual choice based on wage levels; under traditional socialism it is allocated by a government planning board.
C. under a market economy self-interest is the primary motive of economic activity; under socialism, individuals are supposed to act from considerations of the general good.
D. under a market economy the distribution of income is to each according to his ability, effort, and inheritance; under ideal socialism the distribution of income is to each according to his need.
Answer: A
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For the economy as a whole: a. income must equal expenditures
b. expenditures exceed income because of taxes. c. income exceeds expenditures because of saving. d. expenditures exceed income because of the government budget deficit.
If this is a closed economy how many cars will be exchanged?
A. 40,000 B. 20,000 C. 80,000 D. 60,000
Answering the For Whom to Produce question means that:
A. society is determining the size of the economic pie, B. scarcity no longer restricts production. C. society must have a method to decide who will be rich and who will be poor. D. an economy is selecting among its resources for production.
Why can't the government force a natural monopolist to produce the competitive output?
What will be an ideal response?