The relationship between the home and market economics has gone through two distinct s
tages. Early industrialization began the process of transferring some production processes (e.g. clothmaking, sewing, and canning foods) from the home to the marketplace. Although the home economy could still produce these goods, the processes were laborious and the market economy was usually more efficient. Soon, the more important second stage was evident- the marketplace began producing goods and services that had never been produced by the home economy, and the home economy was unable to produce them (e.g. electricity and electrical appliances, the automobile, advanced education, sophisticated medical care). In the second stage, the question of whether the home economy was less efficient in producing these new goods and services was irrelevant; if the family were to enjoy these fruits of industrialization, they would have to be obtained in the marketplace. The traditional ways of taking care of these needs in the home, such as nursing the sick, became socially unacceptable(and, in most serious cases, probably less successful). Just as the appearance of the automobile made the use of the horse-drawn carriage illegal and then impractical, and the appearance of television changed the radio from a source of entertainment to a source of background music, so most of the fruits of economic growth did not increase the options available to the home economy toe either produce the goods or services or purchase them in the market. Growth brought with it increased variety in customer goods, but not increased flexibility for the home economy in obtaining these goods and services. Instead, economic growth brought with it increased consumer reliance on the marketplace. In order to consume these new goods and services, the family had to enter the marketplace as wage earners and consumers. The neoclassical model that views the family as deciding whether to produce goods and services directly or to purchase them in the marketplace is basically a model of the first stage. It cannot accurately be applied to the second (and current ) stage.
1. The reason why many production processes were taken over
by the marketplace was that ____.
A. it was a necessary step in the process of industrialization
B. they depended on electricity available only to the market economy
C. it was troublesome to produce such goods in the home
D. the marketplace was more efficient with respect to these processes
2. It can be seem from the passage that in the second stage _______.
A. some traditional goods and services were not successful when provided by the home economy
B. the market economy provided new goods and services never produced by the home economy
C. producing traditional goods at home became socially
unacceptable
D. whether new goods and services were produced by the home economy became irrelevant
3. During the second stage, if the family wanted to consume new goods and services, they had to enter the marketplace _____.
A. as wage earners
B. both as manufacturers and consumers
C. both as workers and purchasers
D. as consumers
4. Economic growth did not make it more flexible for the home economy to obtain the new goods and services because _____.
A. the family was not efficient in production
B. it was illegal for the home economy to produce them
C. it could not supply them by itself
D. the market for these goods and services was limited
5. The neoclassical model is basically a model of the first stage, because at this stage ____.
A.the family could rely either on the home economy or on the marketplace for the needed goods and services
B. many production processes were being transferred to
the marketplace
C. consumers relied more and more on the market economy
D. the family could decide how to transfer production processes to the marketplace
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