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Economic Midterm
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| Question | Answer |
|---|---|
| The basic economic challenge faced by societies is there are not enough resources to satisfy our wants. This is known as_____. | scarcity |
| Due to limited resources, households, businesses, and the government are forced to make choices. What is given up when a choice is made is known as the ___________. | opportunity cost |
| Identify the factors of production in the making of a car (N)___________ (C)___________(L)__________. | metal, machinery, worker |
| In the circular flow, what do households provide___ receive_____. | resources; income |
| In the circular flow, what do businesses provide_____ receive_____. | private goods/ services; profit |
| In the circular flow, what does the government receive______ provide____. | taxes; public goods/ services |
| A___ is a want, whereas a____ is a need. | steak; food |
| A___ is a good, whereas a ____ is a service. | shirt; haircut |
| A____ is a durable good, whereas a ____ is a non-durable good. | phone; pencil |
| In a mixed economy, economic decisions are made by____. | the government, households, & businesses |
| In a command economy, economic decisions are made by______. | the government |
| What are characteristics of a market economy___,____,____. | consumer sovereignty, free enterprise, capitalism |
| What are characteristics of a command economy____,_____,_____. | communism, no competition, no incentives |
| In a market economy consumers decide what goods and services are produced by the purchase they make. This is known as_____. | consumer sovereignty |
| The economic philosopher who had a major influence on the market economies of the 19th century was____. One of his philosophies was known as laissez faire which means______. | Adam Smith; no government intervention |
| The governments role in a mixed economy is_______,_______. | market protector; market provider |
| The closest place to a market economy is_____, whereas the closest thing to communism (command economy) was_______. | Singapore; North Korea |
| In Japan, the government controls competition between businesses, the result is_____. | less competition |
| The economic philosopher who influenced the development of command economy in communist countries was____. | Karl Marx |
| The driving force in a market economy are people who are willing to take risks in order to make a profit, these are_____. | entrepreneurs |
| An example of a former command economy that is converting to a market economy is____. | China |
| One of the challenges facing countries converting to capitalism is converting government owned businesses to privately owned businesses. This is known as_____. | privatization |
| Explain each of the economic goals: A. Freedom- B. Efficiency- C. Equity- D. Security- E. Full Employment- | A, Households & Businesses answer the basic questions B. use scarce resources for greatest benefit. C. laws to make competition fair D. protect from adverse economic events E. lower unemployment rate the better for society |
| Explain each of the economic goals: F. Price Stability- G. Growth- H. Future Goals- | F. prevent inflation rise in price of goods & services G. hope for better job & nice stuff H. may change as society changes |
| Which are the reasons the government intervenes in the economy? _____,____, ______,______,______ | inadequate info., provide public good/ services, correcting externalizes, resource immobility, inadequate competition |
| The Food and Drug Administration (FDA) and the Federal Aviation Administration (FAA) are examples of_______. | government regulation |
| The government requires businesses to reveal information about their products so consumers can make informed buying decisions. This is known as______. | public disclosure |
| Which was a law passed to prevent monopolies? | ant-trust |
| Anti-trust laws that prevent monopolies are designed to insure there is _____. | adequate competition |
| A paper factory opens in Coosa County , what is the negative externality? | pollution, smoke |
| A paper opens in Coosa County, what is the positive externality? | new work |
| The government needs to provide certain goods and services that are collectively consumed because____> | business produce only items they can withhold if people refuse to pay |
| An example of a public good is___. | roads |
| A consumers desire, ability and willingness to buy a product at a given price is known as___. | demand |
| A producers desires, ability and willingness to produce a product at a given price is known as____. | supply |
| The law of demand states that the ___ the price of a food or service the____ the demand. | higher; lower ( and vice versa) |
| The law of supply states that the ____ the price of a good or service the____ the supply. | higher; higher ( and vice versa) |
| Things besides price that determine demand for a good or service are known as_____. | non-price determinants |
| Explain how the price of an original good can change the demand for complimentary goods______. | if demand for original goods increases demand for complimentary goods increases. |
Created by:
CheyenneW