Term
| Also referred to as the Price System because changing prices dictate supply and demand |
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| Small government planning group determines how the factors of production will be used to produce goods and services, such as in N.Korea and Cuba |
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| There are no pure command or market economies. To some degree, all modern economies exhibit characteristics of both systems, and are therefore known as what type of economic system? |
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| Economic decisions are based on customs and historical precedent |
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| Every society, regardless of its political structure, must develop what to determine how to use its limited productive resources to answer the three basic economic question |
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| The disadvantages of this type of business ownership include potential difficulty raising the financial capital necessary to operate the business and personal liability for all business debts and actions? |
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| If a publicly-owned company is profitable, its Board of Directors may share some of the profits of the company with stockholders in the form of what? |
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| In this type of business, the owners liability is limited to the value of the stock they own in the business? |
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| What is it called when a few sellers control a specific area of the economy to the detriment of consumers? |
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| What are the three basic ways that businesses raise financial capital? |
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| What are the 3 questions about production every society must answer because of scarcity? |
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| The need to make choices about the use of resources arises because? |
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Definition
| everything that exists if limited or finite in quantity |
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| In the price system, what guides economic activity? |
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| Name two of the four ways we learned to increase production |
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Definition
| (Adequate amounts of capital; improvements in technology; improvements in the quality of labor; increased specialization and exchange) |
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| The basic problem of economics is what |
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| Does inflation usually occur in an upturn or downturn in the economy? |
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Term
| Is pollution an example of a positive externality or a negative externality? |
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| If the government sets a price too high and demand doesn’t keep up, what is the result |
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| Name three of the six roles of the U.S. Government in our economy. |
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Definition
| Provides legal framework; ensures competition; provides public goods; controls externalities, redistributes income; stabilizes the economy |
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| One seller controlling a specific area of the economy is referred to as a what? |
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| If productive resources (land, labor, capital, and entrepreneurship) are the inputs of the production process, what are goods and services? |
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| The best alternative NOT chosen |
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| What is it called when you give up something in order to get something else? |
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| A price that “equalizes the amount producers want to sell and consumers want to buy? |
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Term
| What is a major consequence of increased productivity due to specialization and exchange? |
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Term
| What medium of exchange greatly reduces the transaction costs associated with simple trade or barter |
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| We learned that one of the ways to increase productivity is to make improvements in the quality of labor. The increase in skills resulting from education, experience, and training is referred to as what type of capital? |
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| Name two of the four characteristics of money that make it an effective medium of exchange |
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Definition
| scarce, durable, portable, and divisible |
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