| Question |
 |
|
| Answer |
|
|
| 3 economic questions? |
What goods will be produced, How will they be produced, and for whom will they be produced. |
| Who decides what goods will be produced? |
The business |
| Who decides how the goods will be produced? |
Individuals who own and/or manage businesses |
| Who decides for whom will the goods be produced? |
Those who are willing and able to buy them |
| 5 features of Free enterprise? |
Private Property, Choice Voluntary Exchange, Competition, Incentives |
| What is private property? |
Any good owned by an individual or business |
| What is public poverty? |
Any good owned by the government |
| What is a worker's choice? |
They choose their jobs |
| What is the businesses choice? |
They choose the products they will make, the price, quantity, and process |
| What is the buyers choice? |
They choose the products they will buy |
| Voluntary Exchange? |
Individuals have the right to make exchanges |
| Competition? |
Individuals and business are free to compete with each other |
| What is the consumers benefit? |
Bigger selection, better quality lower prices and better service |
| What is the worker's benefit? |
Higher wages |
| What is an incentive? |
encourages or motivates you to do something |
| What is profit? |
Money left over after the cost of production has been paid |
| Total revenue? |
Price of a good times Quantity sold |
| Total Cost? |
Average cost of production times quantity made |
| Resources flow towards...? |
Profit |
| Resources flow away from...? |
Losses |
| What are ethics? |
Right and wrong, morals |
| What is an entrepreneur? |
A person with a special talent to search new ideas, opportunities, and products |
| Entrepreneurs develop...? |
New business opportunities, new products, and new ways of doing things |
| Government's Role in the free economy under free enterprise? |
They enforce contracts and provide public goods |
| What is a contract? |
An agreement between 2 or more people to do something |
| Public goods? |
Benefits more than 1 person, and cannot be denied to anyone |
| Private goods? |
Benefit is denied to all others except the owner |
| What is a free rider? |
Persons who receive the benefits of a good without paying for it |
| What is the circular flow? |
It shows the economic relationship between households, Government, and Businesses |
| Businesses pay...? |
Taxes to government |
| The Government provides...? |
Benefits to businesses and households |
| Households pay...? |
Taxes to the government |
| Businesses provides...? |
Goods and and services to households |
| Households provides..? |
Labor to businesses |
Ch.18 LTI-MA 509
