New Economic Theories

Question 1

Which problems arose as a result of capitalism with little government oversight? Check all that apply.An even distribution of wealth led to little competition.Businesses eventually exploited the working class.Workers who were injured on the job were not protected.There were vast inequalities between workers and owners.Worker’s unions dissolved because employee treatment improved.Big companies drove small companies out of business.

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B: Businesses eventually exploited the working class.; C: Workers who were injured on the job were not protected.; D: There were vast inequalities between workers and owners.; F: Big companies drove small companies out of business.

Question 2

Adam Smith believed that fair prices for goods are determined in a capitalist system

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A: through competition between businesses.

Question 3

In a dictatorship of the proletariat, who controls the government?

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D: working classes

Question 4

Workers competed for jobs in the model factory started by Robert Owen because

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B: he built schools.

Question 5

This excerpt is from The Wealth of Nations by Adam Smith.“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.”

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A: Businesses acting in their own interests expect something in return for their services.

Question 6

The three main ideas behind capitalism as defined by Adam Smith are

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B: competition, self interest, and laissez-faire.

Question 7

Karl Marx developed the economic theory of

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D: communism.

Question 8

communismsocialismcapitalismutopianism

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B: socialism

Question 9

What two principles form the basis for capitalism?

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C: private ownership and free markets

Question 10

Which best explains how a mixed economy addressed problems that arose from capitalism?

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D: Government regulation was minimal, but new laws protected workers and their standard of living.

New Economic Theories Answers

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