New Economic Theories

Question 1

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

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A: through competition between businesses.

Question 2

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

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D: working classes

Question 3

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 4

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.

Question 5

According to Karl Marx, the economic ideas behind socialism would lead to a

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A: communist revolution.

Question 6

In general, which best explains why communist revolutions did not happen?

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C: Capitalist governments enacted reforms.

Question 7

As economic theories, socialism and communism sought to

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B: even out inequalities of wealth.

Question 8

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

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B: he built schools.

Question 9

What two principles form the basis for capitalism?

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C: private ownership and free markets

Question 10

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

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

New Economic Theories Answers

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