GED Social Studies : Markets and Competition

Study concepts, example questions & explanations for GED Social Studies

varsity tutors app store varsity tutors android store

Example Questions

Example Question #1 : Economics

In economic terms a "comparative advantage" is best described as __________

Possible Answers:

the reason why the work force always has less power than those who employ them. 

the manner in which a company with a monopoly can lower prices and ensure the continued lack of competition. 

the ability of one country to produce a resource cheaper than another country can. 

the belief that a country should primarily focus on ensuring a favorable balance of trade by exporting more than it imports. 

the unique advantages possessed by the American Republic that have allowed the country to emerge as the world's dominant economic power. 

Correct answer:

the ability of one country to produce a resource cheaper than another country can. 

Explanation:

In economic terms "comparative advantage" refers to a situation where one country can produce some goods or resources at a lower cost than another country. 

Example Question #203 : Content Areas

Adam Smith is most principally associated with __________

Possible Answers:

freedom of religion.

a system of checks and balances in government.

mercantilism.

the social contract.

laissez-faire economics.

Correct answer:

laissez-faire economics.

Explanation:

Adam Smith was an Enlightenment-era economic philosopher. He is most remembered for laying down the principle of free-market economics called laissez-faire economics. His theory stated that an economy would have the best success if the government does not intervene. His ideas were widely adopted in Europe and America over the next couple of centuries and were an important foundation of the spread of capitalism around the world.

Example Question #204 : Content Areas

The economic theory of mercantilism states that the primary goal of a nation should be _________________.

Possible Answers:

to protect the trading relationships established with other nations

to spread free market capitalism to other nations

to encourage a favorable balance of trade

to prevent taxes from being levied on the wealthiest members of society

the liberation and protection of the working classes

Correct answer:

to encourage a favorable balance of trade

Explanation:

Mercantilism was an important economic theory in the first era of European colonialism, from roughly 1500 until 1800. With mercantilism, the primary goal of a nation, and a government, should be to regulate trade and the means of production in order to encourage a favorable balance of trade. Essentially, for a nation to succeed according to mercantilist theory, it needs to be exporting more than it is importing. This theory drove many of the actions taken by England and France, along with the other colonial powers, during the age of exploration and the age of colonialism.

Learning Tools by Varsity Tutors

Incompatible Browser

Please upgrade or download one of the following browsers to use Instant Tutoring: