What Is Economics?
What is the study of how people use limited resources?
Answer: Economics
What economic system is based mainly on customs and traditions?
Answer: Traditional economy
What type of business is owned by one person?
Sole proprietorship
What is the willingness and ability to buy a product?
Demand
What is the amount of a product producers are willing and able to sell?
Supply
What is the basic economic problem caused by unlimited wants and limited resources?
Answer: Scarcity
What system allows supply and demand to determine prices?
Answer: Market economy
What business is owned by two or more people?
Partnership
What does the law of demand say happens to quantity demanded when price increases?
It decreases.
What does the law of supply say happens to quantity supplied when price increases?
It increases.
What is the next-best alternative you give up when making a choice?
Opportunity cost
What economic system is controlled by the government?
Command economy
What business organization is owned by shareholders?
Corporation
What happens to demand when consumers’ income increases for a normal good?
Demand increases.
What happens to supply when the cost of production increases?
Supply decreases
What are the four factors of production?
Answer: Land, labor, capital, and entrepreneurship
What system combines government control with free markets?
Answer: Mixed economy
What is the main advantage of a corporation?
Limited liability
What are goods that can replace each other called?
Substitutes
What is the point where supply and demand are equal called?
Equilibrium
What is the benefit you receive from choosing one option?
Answer: Incentive
What is private ownership of businesses and property called?
Capitalism
What organization is owned and operated for the benefit of its members?
Cooperative
What are goods commonly purchased together called?
Complements
What happens when the price is above equilibrium?
A surplus occurs.