Economic Quiz 3

Question 0

What is Malthus’s preventative and positive checks?

Answer 0

Preventative: helps to reduce the birth rate through contraception, abortion and infanticide. Based on unnatural vices.

Positive: helps increase the death rate through war, natural disaster, disease and famine. Based on misery.

Question 1

What does physiocracy mean?

Answer 1

The rule of nature, where the belief is nature and natural laws govern human behaviour.

Question 2

Three classes of nature

Answer 2

Productive: farmers, fisherman
Proprietary: do not contribute to economy, but receive the most ie. king, church.
Sterile: transformers of natures produce ie. traders, merchants, teachers, doctors

Question 3

Industrial revolution started

Answer 3

1780-1850

Question 4

5 big changes from industrial revolution

Answer 4

Shift from rural to urban society
Shift from cottage to factory industry
Shift from the production of consumer goods to capital goods
Big increase in profits of new class of industrialists
Big increase in population

Question 5

Two countries with the lowest birth rate and lowest mortality rate

Answer 5

Canada and Japan

Question 6

What problems are associated with low birth rate and low mortality rate

Answer 6

Can enough food be provided, is there enough resources, control growing population
Aging society brings increases in population and pension and rises immigration needs
Richest billion consume 80% of resources while other 6 billion make do with the remaining 20%

Question 7

1950, what 2 mega mega cities with 5 million population

Answer 7

New York and London

Question 8

Adam Smith suggested 3 factors for increasing wealth of nations

Answer 8

Competitive market system: reward success and penalize failure

Division of labour: increase productivity

Parismony: allows an economy to invest more in capital

Question 9

How does the market react to a shortage

Answer 9

Price increases above natural price, which leads to profits increasing, therefore new firms enter the market, surplus amounts, price then decreases to the natural price

Question 10

Most important invention of the industrial revolution

Answer 10

Steam engine

Question 11

4 pillars of a market economy

Answer 11

Trade and specialization
Competition
Private ownership
Legal and social foundation

Question 12

Natural price is made of 3 elements

Answer 12

Rent, wages and profits

Payments made to:

Land, labour and capital

Question 13

Demand less than supply- surplus= price decrease

Demand greater than supply- shortage= price increase

Answer 13

.

Question 14

3 functions of government

Answer 14

Protecting g society from foreign attack

Establishing a legal and social foundation

Provision of public goods

Question 15

Smith included what as public goods

Answer 15

Canal, harbour, post office, coinage, schools and churches

Free education for common people was essential

Question 16

Public good

Answer 16

Goods or services whose benefits are not affected by number of users from which no one can be excluded

Question 17

2 features of a public good

Answer 17

Non-rival: your consumption does not reduce the amount available for others. Ie. TV show

Non-essential: it is impossible/ costly to prevent non-buyers from enjoying the benefit. Ie. lighthouse, military defence

Question 18

What’s a quasi-public good

Answer 18

Private goods that are provided by the government because they involve extensive benefits for the general public. Ie. education, healthcare and postal service.

Question 19

Unemployment rate

Answer 19

Unemployed/ labour force X 100%

Question 20

Participation rate

Answer 20

Labour force/ working age X 100%