Quiz Questions: Chapter Three
1. According to Locke, the power of government should be:
a. Expanded to meet the needs of all citizens.
b. Expanded to meet the needs of corporations.
c. Limited, extending only far enough to protect basic rights of all citizens.
d. Limited, extending only far enough to protect the basic rights of corporations.
2. Locke’s view that labor creates property rights has been influential in the U.S.
a. True
3. Modifying Locke’s views on free markets, Adam Smith’s arguments rest on __________
arguments that unregulated markets and private property will produce greater benefits
than any other system.
a. Kantian
b. Utilitarian
c. Communist
4. According to Smith, when private individuals are left free to seek their own interests in
free markets, they will inevitably be led to further the public welfare by an “invisible
hand.”
a. True
5. Smith’s utilitarian argument is most commonly criticized for making what some call
unrealistic arguments.
a. Smith assumes that no one seller can control the price of a good.
b. Smith assumes that the manufacturer will pay for all the resources used to produce a
product.
c. Smith assumes that humans are motivated only by a natural, self-interested desire
for profit.
d. All the above
6. Social Darwinists had a different take on the utilitarian justification for free markets.
They argued that economic competition would not produce human progress.
a. True
7. The basic problem underlying the views of the social Darwinist is the fundamental
normative assumption that survival of the fittest means survival of the best.
a. True
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8. Karl Marx offers the most critical view of modern private property and free market
institutions. Marx claims that free-market capitalism necessarily produces:
a. Extremes of inefficiency
b. Extremes of efficiency
c. Extremes of equality
9. Many economists now advocate retaining the market system and private property while
modifying their workings through government regulation. This is known as a:
a. Pure capitalist economy
b. Evolutionary economy
c. Mixed economy
10. According to the International Labor organization, it is estimated that 218 million
children are working today.
a. True
11. During the financial crisis in 2008, George W. Bush asked U.S. Congress to pass
legislation to create a Troubled Asset Relief Program (TARP) in the amount of
___________.
a. $1 Trillion
b. $90 billion
c. $ 80 billion
12. Under TRIPS, patents for new products expire after 20 years.
a. True
13. Ricardo looks to which rule setter to normalize trade?
a. World Trade Organization.
b. World Bank.
c. International Monetary Fund.
d. B&C.
14. So called primitive societies used economic systems based on_______________.
a. Small business organization.
b. Tradition –based societies.
c. Barter systems.
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52
© 2012 Pearson Education, Inc. All Rights Reserved.
53
15. Decisions made in a system primarily based on markets
a. Private companies make the main decisions about what they will produce and
who will get it.
b. Land and factories are owned and managed by private individuals.
c. People are motivated to work primarily by the desire to get paid for voluntarily
supplying the things others are willing to pay for.
d. All of the above.