1 What is an ideology in general? What are the two main types of ideologies relevant to business activity in the U.S.? What are the distinctions between "free market" and "command" systems? What components are necessary for each? How does Locke define the state of nature and the law of nature? How these ideas lead to private property rights and the limitation of governmental power? What four problematic assumptions does Locke make that might cast some doubt on his defense of free market economies? How does Adam Smith defend free markets on utilitarian grounds? What should government do, according to Smith, to advance the public welfare? Why monopolistic industries, pollution, and concern for others present difficulties for Adam Smith's theory? How did John Maynard Keynes criticize the free market economy? What does he claim is necessary to maximize the social utility of the economic system? Why does stagflation present an obstacle to his theory? Define Social Darwinism How was Spencer's version of this idea modified to be less callous? What are the basic problems with the idea? What are Marx's four forms of alienation? How does each form help to increase inequalities of wealth and power? 10 How does Marx reply to the utilitarian argument that without private property there would be no incentive to work? Is his reply persuasive? 11 What is substructure? Superstructure? How are these ideas relevant to the real purpose of government? 12 What does Marx mean by immiseration of workers? What three tendencies will help bring this about? Why did immiseration not actually occur? 13 What is a mixed economy? Why would society want to consider such a system? Does it work anywhere in the world today? 14 How new technologies, such as computers and scientific breakthroughs, create difficulties for systems of property ownership? 15 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 16 Locke's view that labor creates property rights has been influential in the U.S a True b False 17 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 d None of the above 18 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 b False 19 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 e B&C 20 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 b False 21 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 b False 22 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 d Extremes of inequality 23 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 d Free market economy 24 According to the International Labor Organization, it is estimated that 218 million children are working today a True b False 25 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 d $70 billion 26 Under TRIPS, patents for new products expire after 20 years a True b False 27 Ricardo looks to which rule setter to normalize trade? a World Trade Organization b World Bank c International Monetary Fund d B&C e None of the above 28 So called primitive societies used economic systems based on _ a Small business organization b Tradition –based societies c Barter systems d None of the above 29 In 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 e None of the above Test Name: chapter 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 c.Limited, extending only far enough to protect basic rights of all citizens a.True b.Utilitarian a.True d.All the above b.False a.True d.Extremes of inequality c.Mixed economy a.True d.$70 billion a.True e.None of the above b.Tradition –based societies d.All of the above ... 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... normative assumption that survival of the fittest means survival of the best a True b False 22 Karl Marx offers the most critical view of modern private property and free market institutions Marx claims... Trade Organization b World Bank c International Monetary Fund d B&C e None of the above 28 So called primitive societies used economic systems based on _ a Small business organization b Tradition