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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What is one of the negatives that political power uses?
(a) Restrictions.
(b) Taxes.
(c) Regulation.
(d) Threat of imprisonment.

2. In a free market, economic power is determined by what?
(a) Inflation.
(b) Supply and demand.
(c) Surplus.
(d) Price and wages.

3. What is the name of the railroad company in California that holds a virtual monopoly?
(a) Main Pacific.
(b) Central Pacific.
(c) Coastal Pacific.
(d) Western Pacific.

4. The term "evils of monopoly" refers to a situation in which the monopolist is completely ______ of the market.
(a) Independent.
(b) Evasive.
(c) In control.
(d) Demanding.

5. When there are _____ ______, firms with good reputations are treated exactly like firms with bad reputations.
(a) Market incentives.
(b) Government regulations.
(c) Customer services.
(d) Quality control.

6. According to the author, what is the cause of the Great Depression?
(a) Capitalism.
(b) Isolationist policies.
(c) Communism.
(d) Government intervention.

7. What does the term "evils of monopoly" refer to?
(a) Coercive monopoly.
(b) Corrosive monopoly.
(c) Coevasive monopoly.
(d) Corrupt monopoly.

8. What is one function of money?
(a) A means of accounting.
(b) A means of saving.
(c) A means of processing.
(d) A means of wealth.

9. What is one example, according to the author, of how property rights can be established?
(a) The Settlement Act.
(b) The Western Settlers Act.
(c) The Homestead Act.
(d) The Gold Rush Act.

10. According to the author, in statism, who owns the members of the tribe?
(a) The masses.
(b) The elders.
(c) The tribe.
(d) The elite.

11. How does government regulation, according to the author, try to protect the consumer?
(a) Through quality control.
(b) Through force and fear.
(c) Through patents and trademarks.
(d) Through elimination of competition.

12. The power of the railroads, according to the author, comes from where?
(a) The market.
(b) The government.
(c) The subsidies.
(d) The economy.

13. What right does the author believe is basic to the concept of freedom?
(a) Property rights.
(b) Human rights.
(c) Familial rights.
(d) Self-governance rights.

14. What is trade without any barriers known as?
(a) Free trade.
(b) Expansionist trade.
(c) Limited trade.
(d) Capitalist trade.

15. The author believes that unions serve a valuable service because they do what?
(a) Prevent the employer from firing the worker.
(b) Raise the benefits to the worker.
(c) Represent the worker to the employer.
(d) Raise the cost of production.

Short Answer Questions

1. What thrives on free trade, according to the author?

2. According to the author, statism is often linked to what other "ism"?

3. To function as a medium of exchange, an item must be durable and what?

4. The author compares statism to what kind of rule?

5. According to the author, what kind of governments use weapons against their own people?

(see the answer keys)

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