Question 1

What are the three key economic questions?

Accepted Answer

what goods and services should be produced?, how should these goods and services be produced?, who consumes these goods and services?

Question 2

Which economic concept neccesitates choices and priorities in society?

Accepted Answer

scarcity

Question 3

Which economic question is answered by basic social values and goals?

Accepted Answer

who gets to consume which goods and services.

Question 4

What are the five basic economic goals?

Accepted Answer

efficiency, freedom, security and predictability, equity, growth and innovation

Question 5

What are the four economic systems?

Accepted Answer

traditional, market, command, mixed

Question 6

Economic system

Accepted Answer

the method used by a society to produce and distribute goods and services

Question 7

Factor payments

Accepted Answer

the income people receive for supplying factors of production, such as land, labor, or capital

Question 8

Patriotism

Accepted Answer

the love of one's own country; the passion that inspires a person to serve his or her country

Question 9

Safety net

Accepted Answer

government programs that protect people experiencing unfavorable economic conditions; e.g. food stamps, social security, disability

Question 10

Standard of living

Accepted Answer

level of economic prosperity

Question 11

Traditional economy

Accepted Answer

economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services

Question 12

Market economy

Accepted Answer

economic system in which decisions on production and consumption of goods and services are based on voluntary exchanges in markets

Question 13

Centrally planned economy

Accepted Answer

economic system in which the central government makes all decisions on the production and consumption of goods and services

Question 14

Command economy

Accepted Answer

economic system in which a central authority is in command of the economy; a centrally planned economy

Question 15

Mixed economy

Accepted Answer

market-based economic system with limited government involvement

Question 16

Market

Accepted Answer

an arrangement that allows buyers an sellers to exchange things

Question 17

Specialization

Accepted Answer

the concentration of productive efforts of individuals and firms on a limited number of activities

Question 18

Household

Accepted Answer

a person or group living in the same residence

Question 19

Firm

Accepted Answer

an organization that uses resources to produce a product, which it then sells

Question 20

Factor market

Accepted Answer

market in which firms purchase the factors of production from households

Question 21

Profit

Accepted Answer

the financial gain made in the transaction

Question 22

Product market

Accepted Answer

the market in which households purchase the goods and services that firms produce

Question 23

Self-interest

Accepted Answer

one's own personal gain

Question 24

Incentive

Accepted Answer

an expectation that encourages people to behave in a certain way

Question 25

Competition

Accepted Answer

the struggle among producers for the dollars of consumers

Question 26

Invisible hand

Accepted Answer

term economists use to describe the self-regulating nature of the marketplace

Question 27

Consumer sovereignty

Accepted Answer

the power of consumers to decide what gets produced

Question 28

Socialism

Accepted Answer

a social and political philosophy based on the belief that democratic means should be used to evenly distribute wealth throughout a society

Question 29

Communism

Accepted Answer

a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government

Question 30

Authoritarian

Accepted Answer

requiring strict obedience to an authority, such as a dictator

Question 31

Main goal of the Former Soviet Union

Accepted Answer

build national power and prestige in the international community

Question 32

See image

Accepted Answer

-own and allocate land, labor, and capital

Question 33

Role of central government

Accepted Answer

-decide the quantity, production process, and distribution of goods and services

Question 34

Collective

Accepted Answer

large farm leased from the state to groups of peasant farmers

Question 35

Heavy industry

Accepted Answer

industry that requires a large capital investment and that produces items used in other industries; e.g. automobile, steel, oil

Question 36

Laissez faire

Accepted Answer

the doctrine that states that government generally should not intervene in the marketplace

Question 37

Private property

Accepted Answer

property owned by individuals or companies, not by the government or the people as a whole

Question 38

Free enterprise

Accepted Answer

an economic system characterized by private or corporate ownership of capital goods, investments that are determined by private decision rather than by state control, and determined in a free market

Question 39

Continuum

Accepted Answer

a range with no clear divisions

Question 40

Transition

Accepted Answer

period of change in which an economy moves away from a centrally planned economy toward a market-based system

Question 41

Privatize

Accepted Answer

to sell state-run firms to individuals

Question 42

What needs and wants are hard to answer?

Accepted Answer

national defense, roads and highway systems

Question 43

What needs and wants are answered more fairly with government involvement?

Accepted Answer

education, health care, employment, mass transit

Question 44

How is the government in North Korea involved in their economy?

Accepted Answer

government owns all the property and economic output. state-owned industries produce 95% of goods.

Question 45

How is the government in China involved in their economy?

Accepted Answer

1/4 of all enterprises are at least partially owned by individuals. China is in transition to a market-based system.

Question 46

Why do people need to buy and sell goods or services?

Accepted Answer

Because no one is self-sufficient.

Question 47

What factors create the phenomenon of the "invisible hand"?

Accepted Answer

competition and self-interest

Question 48

Which of the following is an advantage of a centrally planned economy?

Accepted Answer

the system can work quickly to accomplish specific goals

Question 49

In a socialist country____________________

Accepted Answer

central planning is unnecessary.

Question 50

The United States economy is a mixed economy _________________________.

Accepted Answer

based on the principles of the free market, but allows some government intervention.

Question 51

Government intervention in a modern economy is useful because ____________________________.

Accepted Answer

governments are able to provide some goods and services that the marketplace has no incentive to produce.

Question 52

Each society determines who will consume what is produced based on___________________________.

Accepted Answer

its unique combination of social values and goals.

Question 53

To improve its standard of living, a nation's economy must _________________________________.

Accepted Answer

grow through innovation.

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