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Chapter 1 Introduction Answers to End-of-Chapter Problems 1. Q: Economic activity around the world is mainly organized by: a) internet connections. b) family connections. c) informal arrangements. d) market transactions. A: d) market for transactions. Explanation: Today the vast majority of economic activity worldwide is organized by market transactions, which are activities that produce and exchange goods and services that other people are willing to pay for. From poor rice farmers in Cambodia to multi-millionaire investment bankers on Wall Street, the market rules. 2. Q: In the 10 years since the Great Recession, the labor market and housing market recovered: a) in every country. b) in most areas of the United States, but not everywhere. c) in every part of the United States. A: b) in most areas of the United States, but not everywhere. Explanation: Since the Great Recession, most areas in the United States have recovered. During the recovery phase, not all parts of the country experienced growth at the same time. 2. Q: Technological change a) moves faster in some industries than others. b) is found equally in all parts of the economy.
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