Additional Multiple Choice Questions: 1. _______________ specifies what different parties must do, whatever the external circumstances, and provides for enforcement or compensation for nonperformance. A. Socialism B. A Contract C. A Market D. The Invisible Hand 2. _________________ refers to the skills, education, and training which individuals in the labor force possess. A. Produced Assets B. Human Capital C. Natural Assets D. A Property Right 3. The economy of the “former Soviet Union” A. achieved Karl Marx vision of an “ideal communist society,” since the ownership and use of all resources was in the hands of “the people” without any intervention whatsoever by the government. B. functioned so efficiently that the country produced a combination of goods beyond its production possibilities curve year after year after year. C. perhaps provides the best example of a large society with an economic system close to “pure socialism.” D. More than one (perhaps all) of the above answers is correct. 4. _______________ traces its philosophical roots to the work of 19 th Century Philosopher Karl Marx. A. The “Invisible Hand” B. Capitalism C. Communism D. Feudalism In which of the following countries do individuals enjoy the greatest amount of Economic Freedom? A. Hong Kong. B. Venezuela. C. Mexico. D. The United States. 5. 6. In a free market economy, households A. are the ultimate consumers of most finished goods/services. B. are the primary suppliers of labor to firms. C. do not behave as “rational decision makers.” D. More than one (perhaps all) of the above answers is correct. 7. Which of the following is an example of a “Natural Asset”? A. The “college education” which has been acquired by approximately 27% of the U.S. population. B. The 1.7 trillion tons of coal reserves in the United States. C. The Volkswagen manufacturing plant near Chattanooga, TN. D. More than one (perhaps all) of the above answers is correct. 8. Adam Smith was A. a 17th century English mercantilist. B. an 18th century Scottish economist. C. a 19th century German philosopher, economist, and revolutionary. D. a 21st century American real estate mogul who became a politician. 9. Economic Man (aka, homo economicus) is A. both rational and self-interested. B. rational, but not self-interested. C. self-interested, but not rational. D. neither rational nor self-interested. Answers to Additional Multiple Choice Questions: 1. 2. 3. 4. 5. 6. 7. 8. 9. B B C C A D B B A

Economic Systems - Capitalism versus Socialism (Answer Key)

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