Economic Systems
The Basics
Government Roles
Unintended Consequences
100
This economic system is one in which private individuals are more likely to gain wealth.
What is a Market/Free Market Economy?
100
This term was used by Adam Smith to describe the idea that by pursuing their own self-interest, individuals help the economy grow.
What is the "invisible hand"?
100
This is one way the government affects the physical flow of factors of production and/or goods and services in a mixed economy.
What is purchasing goods and services from firms?
What is purchasing factors of production from households?
100
This term is used to describe a beneficial side effect created by a particular good or service.
What is a positive externality?
200
This economic system is one in which the government makes all the decisions.
What is a Centrally Planned/Command Economy?
200
This is the primary incentive for manufacturers to sell their products.
What is profit?
200
Unemployment compensation is an example of this type of good or service that government provides in order to limit negative economic consequences.
What is a "safety net"?
200
This is a shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers.
What is a public good?
300
This economic system is based on agriculture and trading of goods and services.
What is a Traditional Economy?
300
These four types of resources are sometimes called "the four factors of production".
What are land, labor, capital, and entrepreneurship?
300
Traditionally, this is the primary role that the federal government plays in regard to the operation of U.S. oil refineries.
What is regulation of pollution?
300
This term is used to describe a harmful or undesired side effect created by a particular good or service.
What is a negative externality?
400
This economic system is intended to balance the protection of both individual and social rights.
What is a mixed economy?
400
This is one of the three key economic questions.
What is...
What goods and services should be produced?
How should those goods and services should be produced?
Who consumes those goods and services?
400
In a free market economy, this is one way the government helps increase economic productivity.
What is encouraging innovation?
400
In a laissez faire system, this group is forced to compete for access to resources.
What are producers?
500
Under the original concept of this command economic system, all property would collectively belong to the people.
What is communism?
500
The key function of an economic system is to ensure that these are produced and distributed.
What are goods and services?
500
Economic policies of the federal government that serve to stimulate a contracting economy or cool a rapidly expanding one are intended to stabilize this economic process.
What is a business cycle?
500
This is someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it is provided as a public good.
What is a free rider?