Question : 81) A modern economy like Canada’s largely organized by A) governments : 1384122

81) A modern economy like Canada’s is largely organized by

A) governments at all levels coordinating the activities of firms and citizens.

B) individuals forming cooperative enterprises and labour unions.

C) individuals following their own self interest, doing what seems best for themselves.

D) benevolent individuals pursuing the public interest.

E) the self-interested behaviour of a small number of individuals.

82) An insight first fully developed by Adam Smith is that

A) without benevolence production would not occur.

B) all individuals are motivated solely by self-interest.

C) self-interest, not benevolence, is the foundation of economic order.

D) self-interest undermines effective economic order.

E) individual self-interest is the only necessary force for social order.

83) In the Canadian economy, most decisions regarding resource allocation are made by

A) consumers and producers interacting in the price system.

B) the various levels of government.

C) negotiation between unions and firms.

D) business firms only.

E) legal contract.

84) With reference to the circular flow of income, how is the allocation of resources largely decided?

A) by central authorities only

B) by central authorities and firms only

C) by firms and households acting independently

D) by political parties and firms only

E) by individuals only

85) The key decision makers in a market economy are

A) households, firms, and government.

B) individual citizens, non-profit organizations, and the Bank of Canada.

C) governments and all institutions under government control.

D) large corporations and labour organizations.

E) corporations and governments.

86) Economists usually assume that households and firms, respectively, maximize

A) income and sales.

B) savings and profits.

C) wages and revenues.

D) utility and profits.

E) expenditures and profits.

87) In general, which of the following statements is an accurate description of economists’ assumptions about households? Households

A) make consistent decisions, maximize utility, and are the principal owners of the factors of production.

B) do not make consistent decisions, maximize satisfaction, and are the principal owners of the factors of production.

C) make consistent decisions, maximize profits, and are the principal users of the factors of production.

D) do not make consistent decisions, maximize profits, and are the principal users of the factors of production.

E) make consistent decisions, maximize savings, and are the principal users of the factors of production.

88) Which of the following is illustrated by the circular flow of income?

A) the flows of expenditures and income in a household

B) that firms own the factors of production

C) the interaction of households and firms through the factors and goods markets

D) that the flow of payments moves in the same direction as the flow of goods

E) that there is no relationship between goods markets and factor markets

89) Which of the following represents a typical “real” flow (as opposed to a financial flow) in the circular flow of income?

A) goods going from producers to consumers

B) factor services going from producers to consumers

C) goods going from consumers to producers

D) money payments going from consumers to producers

E) money payments going from producers to consumers

90) If some income earned by households is not spent on output, or if some income earned by firms is not spent on factor services, the circular flow of income will

A) stop.

B) run over.

C) expand.

D) contract.

E) explode.