Question 1

The three basic economic decisions are:

Accepted Answer

The three basic economic decisions that every society must make are what to produce (determining which goods and services to offer based on resources and demand), how to produce (deciding on the methods and technologies to use in the production process), and for whom to produce (determining the distribution of the produced goods and services among the population).

Question 2

The basic economic decisions are faced:

Accepted Answer

The basic economic decisions are faced in every economy due to the fundamental problem of scarcity. Scarcity means that there are limited resources to meet unlimited wants, which necessitates decision-making on allocation regardless of the economy's type or level of development.

Question 3

The basic economic decisions:

Accepted Answer

Every society, regardless of its level of development, must make basic economic decisions about what to produce, how to produce, and for whom to produce due to the universal problem of scarcity.

Question 4

Which of the following is NOT a basic economic decision that must be made by every society?

Accepted Answer

The basic economic decisions every society must make involve what to produce, how to produce, and for whom to produce. The decision regarding what goods and services consumers will need most is more related to market demand and is not considered a basic economic decision that societies must make.

Question 5

Every country in the world, regardless of its political or economic system, must determine:

Accepted Answer

All of the choices (A, B, C) are fundamental economic questions that every country must address, regardless of its political or economic system. These questions relate to production methods, types of goods and services to be produced, and distribution of those goods and services.

Question 6

The way a society is organized to make the basic economic decisions is referred to as its:

Accepted Answer

An economic system refers to the means by which societies or governments organize and distribute available resources, goods, and services across a geographic region or country.

Question 7

Decisions about what goods and services will be produced, how they will be produced, and who will get them, must be made in:

Accepted Answer

These decisions are fundamental to all types of economies, whether they are market economies, planned economies, socialist, capitalist, or any other economic system. Each system has its own way of addressing these questions, but all must confront and resolve them.

Question 8

With reference to the basic economic decisions, all economies must determine:

Accepted Answer

All economies must decide on the methods and techniques to use in the production of goods and services, as this is fundamental to addressing the basic economic problem of how to allocate scarce resources. Choices A, C, and D are more specific to certain economic systems or policy decisions rather than fundamental economic decisions that all economies must make.

Question 9

A society's economic system is defined by:

Accepted Answer

The way in which basic economic decisions are made (what to produce, how to produce, and for whom to produce) defines a society's economic system, such as capitalism, socialism, or a mixed economy.

Question 10

The way in which a country makes the basic economic decisions depends on:

Accepted Answer

The organization of economic relationships among households, businesses, and government determines how a country makes its basic economic decisions, as it reflects the structure of its economic system (e.g., market, command, or mixed economy).

Question 11

Which of the following statements best describes the relationship among scarcity, economic decisions, and economic systems?

Accepted Answer

Scarcity, a fundamental economic problem, necessitates making choices about how to allocate limited resources. These choices, or economic decisions, are made within the framework of an economic system (e.g., capitalism, socialism) that a society adopts. Thus, scarcity leads to economic decisions, which are structured by the economic system.

Question 12

Which of the basic economic decisions always requires a dependence on markets, regardless of the type of system an economy has?

Accepted Answer

In some economic systems, such as command economies, decisions about production and quantity are made by central authorities rather than markets. Therefore, none of the options always require a dependence on markets.

Question 13

An economy that relies largely on custom or ritual when making economic decisions:

Accepted Answer

Traditional or agrarian economies rely largely on custom, belief systems, or rituals to make economic decisions, such as what to produce, how to produce it, and for whom to produce. These are often found in rural, non-industrial societies.

Question 14

The economic systems of people such as some early Native American tribes that were small, focused on agriculture, and operated with production methods not changed for generations are best characterized as:

Accepted Answer

Traditional or agrarian economies best describe the economic systems of early Native American tribes that were small, focused on agriculture, and operated with production methods not changed for generations. These economies are characterized by reliance on traditional agriculture and other methods of production that have been passed down through generations.

Question 15

You would expect a society with a traditional economy to have most of its economic activity directed toward:

Accepted Answer

Traditional economies are often based on subsistence farming or agriculture, where the primary focus is on producing enough food and goods to meet the needs of the community.

Question 16

Which of the following statements about traditional economies is true?

Accepted Answer

Traditional economies often incorporate elements such as reliance on barter, roles tied to family or gender, and decision-making based on historical or social norms, making all the provided statements true.

Question 17

Up for Debate, "Is Western-Style Development Appropriate for Other Cultures?" discusses the high standards of living for people in the United States and Western Europe and

Accepted Answer

The correct choice discusses the debate on the applicability of Western-style systems and institutions in countries with different histories and cultures, presenting arguments for both sides of the issue.

Question 18

Which of the following statements describing a market economy is FALSE?

Accepted Answer

In a market economy, households not only buy goods and services but also sell labor and other resources to businesses. Businesses sell goods and services but also buy resources from households. This makes statement A false, as it oversimplifies the interactions between households and businesses.

Question 19

In a market economy the three basic economic decisions are made by the:

Accepted Answer

In a market economy, the three basic economic decisions—what to produce, how to produce, and for whom to produce—are made through the interaction of individual buyers and sellers based on prices. This system is driven by the forces of supply and demand, where prices are signals that coordinate economic activity without the need for centralized control.

Question 20

In a market economy, the willingness and ability of buyers to purchase goods and services helps to:

Accepted Answer

In a market economy, the willingness and ability of buyers to purchase goods and services influence the prices of those goods and services, determine who gets them, and decide what will be produced and in what quantities. This is because market economies rely on supply and demand to set prices and allocate resources.

Quiz 2: Economic Decision Making and Economic Systems