W Q1. (01.02 LC) Which of the following best restates one of the basic economic questions? (5 points) O What is the fairest distribution of wealth? How can constraints be minimized and resources maximized? O What is the most efficient economic system? Which institutions are worth preserving? Who should get the scarce resources that are produced? W Q 2. (01.02 LC) Which of the following describes why the basic economic questions need to be answered? (5 points) Economic systems are mixed in real-life economies. Where to find the next valuable resource is difficult to determine. Scarce resources require trade-off decisions. A healthy system requires a strong organizational principle. Price allows people to compare a numerical value to diverse goods and services. Q 3. (01.02 LC) Which of the following best describes a command economy? (5 points) Resource allocation is left up to individuals and firms. O No central government exists to enforce property rights. A strong central government commits to the free exchange of goods and services. Various laws shape and define economic output and distribution goals.m D 4i(01_02Lc) The "invisible hand" is understood as the (5 points) 0 labor required to produce valuable goods and services 0 set of regulations in a command economy that promote fairness O principle that self-interest guides individuals to the general good 0 bureaucracy that enforces the commands of central planners O institution that divides public and private property K] Q 5.(0'l.02LC) What is the key difference between command and market economies? (5 points) 0 A market economy places a strong emphasis on a small group holding responsibility for planning production. 0 A command economy considers private property essential to protect, while a market economy places no value on private property 0 The basic economic questions are unaddressed in a market economy. 0 Households answer the basic economic questions in a market economy, while a group of leaders answer them in a command economy. 0 A command economy depends much more on the principle of the invisible hand