Exam 2 Freedom in American Society

all of the following are synonym of capitalism EXCEPT

Social market system***

free enterprise system

price system

market economy

market process

The notion that the free market channels self-interested desires into actions that are beneficial to others is often referred to as

the "invisible hand" of the market

The term used to describe the legal transfer of wealth from producers to beneficiaries via the political process is

redistribution

all of the following are conditions for maintaining a market economy EXCEPT

a commitment to distributive justice ***

mutual trust among participants

enforcement of contacts

clearly defined property rights

the legal prohibition of force, fraud, and theft

Economic value, like beauty, is always in the eye of the beholder. in other words, economic value is always

subjective

In the market economy, the _______ is sovereign

consumer

The two central concept of economic theory are

scarcity and choice

capitalism is an economic system that typically benefits producers at the expense of consumers and workers

False

The art of economics consists in looking at the long-term effects of any act or policy. It consists in tracing the consequences of policy not merely for one group but for all groups.

True

The market system is a neutral feedback system, a mirror that reflects the values of and choices made by consumers

True

Acts of destruction of things of real economic value can lead to long-term economic benefits for society as a whole.

False

The opposite of a free market economy is a planned or command economy

true

the market is a method of recording consumer preferences and allocating resources, an information system that transmits knowledge spontaneously through the signals sent out by prices.

true

Christ's commandment "Thou shalt not steal" denies the legitimacy or rightness of private property

False

Time is an example of a "free good"

False

In a command economy, government planners dictate what is produced

True

The "price system" may be regarded as a medium of communication, a language of a kind

true

The market order is characterized by voluntary exchange

True

Economics is a science of ends, not of means

False

In a market economy, the accumulation of 'capital' arises from the individual's decision to save and invest his personal resources

True

Those who plan economic production in a planned or socialized economy inevitably have greater knowledge of the needs and wants of consumers than their counterparts in a capitalist economy

False

Karl Maxx's Labor Theory of value assumes that the value of any economic good or service can be objectively determined by calculating the value of the labor involved in its production

True

Capitalism is a form of planned or command economy

False

"we have the right, as individuals, to give away as much of our own money as we please in charity, but as members of Congress we have no right to appropriate a dollar of the public money."

Davy Crockett

"There is no such thing as a 'free lunch'

Milton Friedman