Economic Basics
This term describes how a society organizes the production and distribution of goods and services.
What is an economic system?
In this economic system, individuals own most of the resources and businesses.
What is capitalism (free enterprise)?
This type of economy gives the government the power to make most economic decisions.
What is a command economy?
In this system, economic decisions are based on customs and traditions passed down through generations.
What is a traditional economy?
This term describes the growing integration of national economies around the world.
What is globalization?
This economic problem exists because resources are limited but human wants are unlimited.
What is scarcity?
Prices in a market economy change based on this interaction between buyers and sellers.
What is supply and demand?
This thinker believed capitalism unfairly exploits workers.
Who is Karl Marx?
Most modern nations operate under this type of economic system.
What is a mixed economy?
When a company moves jobs to another country to reduce costs, it is engaging in this practice.
What is offshoring?
This basic economic question focuses on who receives goods and services.
What is “for whom will goods be produced?”
This economist believed self-interest motivates people to work hard and take risks.
Who is Adam Smith?
This theory argues that the value of a product comes from the labor used to make it.
What is the labor theory of value?
This system combines private ownership with government regulation or involvement.
What is a mixed economy?
Advances in this area have lowered communication and transportation costs worldwide.
What is technology?
When a society chooses to produce more of one product and less of another, it is facing this concept.
What are trade-offs?
Adam Smith used this metaphor to explain how individual choices can benefit society as a whole.
What is the invisible hand?
This term describes the difference between the value workers create and the wages they are paid.
What is surplus value?
This index ranks countries based on how much economic freedom they allow.
What is the Index of Economic Freedom?
This Cold War–era event removed a major political barrier to global trade.
What is the fall of the Berlin Wall (end of the Cold War)?
These three questions must be answered by every society, regardless of wealth or size.
What are the three basic economic questions?
Competition in this system encourages efficiency, innovation, and lower prices.
What is free enterprise?
In this system, the government often controls or sets prices instead of the market.
What is socialism?
This country ranked lowest on the Index of Economic Freedom in 2005.
What is North Korea?
These effects of globalization are easier to recognize because they are concentrated on specific groups.
What are the costs of globalization?