AP Macro Name ________________________________
Pair Date __________________ Pd ____________
Free Trade (19:30) www. izzit.org
Viewing Guide – Part 1: Markets
1. Milton Friedman won the __________________ in economics.
2. Friedman’s research led him to believe in the power of _______________.
3. Hong Kong has few natural ___________.
4. In 1980 when Milton Friedman visited Hong Kong, it was still a ___________ colony,
not part of China.
5. Without government invention in the economy, ___________ became an economic powerhouse.
6. Between 1950 and 2000, Hong Kong’s _________________ increased ten-fold.
7. Since 1980, free markets have spread around the ____________.
8. Adam Smith’s book, ________________________________, explains why the free
9. ___________________________ is what we do together of our own free will. 10. ______________ that emerge in the market coordinate activities of millions of
independent people, as if there is an “_____________________” at work.
11. In the market, we ______ with our pocketbooks.
12. In a market economy, in order to make your life better, you have to _________ the lives
13. Even a product as simple as a ___________ is the result of complex interaction among
thousands of people.
14. The free market not only promotes productive efficiency but also fosters harmony and _________.
15. The places where people have the most __________ are the countries where the standard
of living is the highest.
Viewing Guide – Part 2: Creative Destruction
1. Competition means businesses face the risk of ____________.
2. Successful businesses are those that can adjust and __________ to changes. 3. Economists call the constant ____________ of the economy “creative destruction.”
4. Today almost __________ people have access to cell phones.
5. Market forces are both creative and ___________________.
6. The economy is not a ______________ game.
7. In the last 100 years, more _________ has been created than in the previous 100,000
8. To buy a personal computer 25 years ago took the average person ________ hours of
work. Now it takes _____ hours.
9. Free markets regularly turn _____________ into consumer goods.
10. Poor U.S. households today are more likely to own a refrigerator, air-conditioner, and
dishwasher than the ____________ household was in 1970.
1. Milton Friedman won the
A) Nobel Prize in economics
B) Election for president of Sweden
D) Academy Award
2. Hong Kong’s only significant natural resource is its
B) Plentiful land for agriculture
D) Diamond mines
3. Between 1950 and 2000, Hong Kong’s GDP per capita
A) Increased 10%
B) Decreased 10%
C) Increased 100%
D) Increased 1000%
4. When economists use the term self-interest they are referring to
A) Self-centeredness; interest in one’s self
B) Pursuit of a person’s own goals, whatever those are
C) Forcing others to do what you want
D) Tricking others to get what you want
5. Adam Smith’s concept of the “Invisible Hand” means that
A) Someone is secretly directing and controlling the economy
B) People are stealing things when no one is looking
C) In order to prosper, you must improve the lives of others
D) The market is an illusion
6. According to host Johan Norberg, the standard of living is highest where
A) People have the most freedom
B) Governments control the largest share of the economy
C) People don’t trade with outsiders
D) No one is allowed to get rich
7. Hong Kong thrived and prospered because it embraced
A) High tariffs to protect its industries from foreign competition
B) Government control of the economy
C) Free markets
D) Agricultural subsidies
8. In 1776, Adam Smith wrote
A) The Declaration of Independence
B) The Wealth of Nations
C) The Communist Manifesto
D) Hong Kong’s constitution
9. Market forces are both creative and
D) Directed by government
10. In a free market system, which of the following options is not available to businesses?
A) Be competitive
B) Adjust and adapt to changes
C) Be creative
D) Lobby the government for restrictions on competitors