In a market economy, the invisible force that drives the economy through self-interest and competition?
Invisible Hand
100
When buyers and sellers meet in a market, they agree to the idea of...
Voluntary Exchange
100
When a limited amount of goods and services are available to meet unlimited wants and needs?
Scarcity
100
Everyone has the same economic rights under the law...
Legal Equality
200
In a market economy, who drives the market?
Producers and Consumers
200
To change from private ownership to government or public ownership is to...
Nationalize
200
The ability for everyone to enter and compete in the marketplace is called?
Open Opportunity
200
What are the factors of production?
Land, Labor, Capital, Entrepreneurship
200
To determine if you should continue to do something... you should...
Determine if the marginal benefit is MORE than the marginal cost.
300
A government payment that helps cover the cost of an economic activity that has the potential to benefit the public as a whole.
A Subsidy
300
North korea is an example of what type of economic system?
Command economy (Centrally-Planned)
300
The idea that people or countries would focus and concentrate their efforts in the areas in which they have an advantage is referred to as?
Specialization
300
The value of the next best decision?
Opportunity cost
300
Consists of all the goods and services that are necessary for the function of society?
Infrastructure
400
Subtracting the costs of producing a product from the revenue gained by selling it... equals what???
Profit
400
A modified free enterprise economy is a type of?
MIXED ECONOMY
400
USA has 80 pencils and 240 pens.
China has 100 pencils and 400 pens.
Who has the comparative advantage in Pens?
China
400
Define Normative & Positive Statements.
Normative = value judgments
Positive = facts
400
What would cause an outward (or rightward) shift in the production possibilities curve?
Changing technology, resources, quality, or quantity.
500
Draw the Circular Flow Model (basic)
Government center.
Businesses left, households/individuals right.
Factor market on top, product market on bottom.
Counter-clockwise flow is resources/goods.
Clockwise flow is payments.
500
"The economy attempts to provide for everyone" best suits which economic system?
Command Economy (Centrally Planned)
500
USA has 80 pencils and 240 pens.
China has 100 pencils and 400 pens.
What terms of trade benefit both countries?
...ToT vary... (Mason will confirm/deny)
500
Occurs when people who are not part of a marketplace interaction benefit from it or pay part of its cost.
Market Failure
500
The three questions of scarcity?
WHAT (will be produced)
HOW (will it be produced)
FOR WHOM (will it be produced for)