1. Which of the following is true concerning production in a free market economy?
a. the government typically tells producers what to make
b. the government typically tells the producers how much to make
c. the producer does not have any control over how much of a product to make
d. the producer typically decides what to make by what he or she thinks will be in demand.
2. Which of the following represents how private property rights act as incentives in a free market economy?
a. In a free market economy, the government does not allow people to own any private property, so there are few incentives to create.
b. All of these are correct.
c. Private property laws are of little importance to governments in free market economies.
d. It is often stated that because of copyright laws and other protections on private property, entrepreneurs are encouraged to develop their ideas.
3. In the production possibilities frontier shown in this graph, what could cause production to move from point b to point d? growth
a. All of these could cause this movement
b. Improvements in efficiency
c. Investment in human capital
d. Investment in capital