Chapter 1 Reading Quiz

1.  In the market for goods and services, _____________ supply the goods and services.

1. governments 
2. households 
3. firms 
4. assembly lines 

2.  Specialization occurs when 

1. workers do the same task repeatedly 
2. workers do many different tasks  
3. workers constantly change tasks 
4. workers multitask 

3. In a command economy, economic decision-making is 

1. guided by the Invisible Hand 
2. centralized 
3. made by private owners 
4. decentralized 

4.  The Invisible Hand describes how society reaches the most efficient outcome when consumers and producers are lead by

1. corruption 
2. greed
3. self-interest
4. the government 

5. Regulations are necessary because

1. government is efficient 
2. market failures do not exist in a market economy
3. market failures can occur in a market economy
4. government is inefficient 

6. A key feature of a market economy is 

1. private ownership 
2. government ownership
3. centralized decision making
4. military ownership 

7.   In the labor market, _______________ supply labor.

1. firms 
2. banks 
3. governments 
4. households 

8.  Economies of scale occurs when the average cost of producing a good ________________ as the level of production increases.

1. equals zero 
2. increases
3. stays the same
4. decreases 

9. Economics is the study of how humans allocate _____________ resources

1. unlimited 
2. zero
3. scarce
4. abundant 

10. When the production of a good or service is divided into separate smaller tasks performed by different people, this is called

1.  automation 
2. division of labor
3. economies of scale
4. specialization