Terms
Economic Systems
Capitalism
Supply and Demand
It's On Your Test
100
temporary lack of one or more goods
What is a shortage?
100
the method used by society to produce and distribute goods and services
What is an economic system?
100
True or False: Free markets describe an arena of involuntary exchange.
False (voluntary exchange)
100
The desire of one to pay for a good/service, and the ability to do so is called…
What is demand?
100
Point F represents a ________ economy.
What is inefficient?
200
greatest output of goods and services through the best use of resources
What is efficiency?
200
an economic system in which decisions are made by individuals and center on exchange/trade
What is a capitalist/free market economy?
200
the incentive do manufacturers have to sell their products
What is profit?
200
___________ is a cost that will rise or fall depending on the quantity of supply produced.
What is a variable cost?
200
The government of a country must make a decision between spending money on a hospital or spending the same amount on border security. What kind of decision is this?
What is "guns or butter?"
300
land, labor, capital
What are the factors of production?
300
an economic system that relies on habit, custom, or ritual to decide questions of consumption and production of goods and services
What is a traditional economy?
300
the doctrine that government generally should not intervene in the marketplace
What is laissez faire?
300
If the demand curve shifts to the right, this signifies...
What is an increase in demand?
300
State the Law of Demand.
As the price of a good/service increases, the quantity demanded will decrease
(As the price decreases, the quantity demanded will increase)
400
the basic economic condition of all goods and services
What is scarcity?
400
economic system in which the central government determines how to answer all three economic questions
What is a command economy?
400
Adam Smith’s seminal economic work about the free market is known as the . . .
What is the Wealth of Nations?
400
Latin term that acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same
What is ceteris paribus?
400
State the Law of Supply.
As prices increase, supply increases
500
government programs that protect people and give them a sense of security and predictability in society
What is a safety net?
500
In this type of economy, children tend to have the same jobs that their parents did
What is a traditional economy?
500
The phenomenon where self-interest and competition work together, as observed by Adam Smith, is known as . . .
What is the invisible hand?
500
________________ show how much a firm can reasonably produce at the prices people agree to buy the product at.
What are supply schedules?
500
List the three questions all economies seek to answer.
What goods and services should be produced?
How should they be produced?
Who should consume them?