Chapter 1

Question 1

Mixed Market Economy

Answer 1

An economic system with elements of both a command economy and a market economy.

Question 2

Competition act

Answer 2

Prohibits a variety of business practices that lessen competition.

Question 3

Input market

Answer 3

Firms buy resources that they need in the production of goods and services.

Question 4

Economic system

Answer 4

The way In which a nation allocates its resources among its citizens.

Question 5

Perfect competition

Answer 5

A market or industry characterized by a very large number of small firms producing an identical product so that none of the firms has any ability to influence price.

Question 6

Not-for-profit organization

Answer 6

An organization that provides goods and services to customers, but does not seek to make a profit while doing so.

Question 7

Market

Answer 7

An exchange process between buyers and sellers of a particular good or service

Question 8

Supply curve

Answer 8

Graph showing how many units of a product will be supplied at different prices.

Question 9

Demand and supply schedule

Answer 9

Assessment of the relationship between different levels of supply and demand at different price levels.

Question 10

Privatization

Answer 10

The transfer of activities from the government to the private sector.

Question 11

Factors of production

Answer 11

The resources used to produce goods and services: labour, capital, entrepreneurs, and natural resources.

Question 12

Private enterprise

Answer 12

An economic system characterized by private property rights, freedom of choice, profits, and competition.

Question 13

Command economy

Answer 13

An economic system in which government controls all or most factors of production and makes all or most production decisions

Question 14

Output market

Answer 14

Firms supply goods and services in response to demand on the part of consumers

Question 15

Supply

Answer 15

The willingness and ability of producers to offer a good or service for sale.

Question 16

Oligopoly

Answer 16

A market or industry characterized by a small number of very large firms that have the power to influence the price of their product and/or resources.

Question 17

Monopolistic competition

Answer 17

A market or industry characterized by a large number of firms supplying products that are similar but distinctive enough from one another to give some ability to influence price.

Question 18

Deregulation

Answer 18

A reduction in the number of laws affecting business activity.

Question 19

Surplus

Answer 19

Situation in which quantity supplied exceeds quantity demanded.

Question 20

Market price (equilibrium price)

Answer 20

Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

Question 21

Trade association

Answer 21

An organization dedicated to promoting the interests and assisting the members of a particular industry

Question 22

Demand curve

Answer 22

Graph showing how many units of a product will be demanded at different prices.

Question 23

Market economy

Answer 23

An economic system in which individuals control all or most factors of production and make all or most production decisions.

Question 24

Law of supply

Answer 24

The principal that producers will supply more of a product as price rises.

Question 25

Capitalism

Answer 25

An economic system in which markets decide what, when, and for whom to produce.

Question 26

Communism

Answer 26

A type of command economy in which the government owns and operates all industries.

Question 27

Demand

Answer 27

The willingness and ability of buyers to purchase a product or service.

Question 28

Law of demand

Answer 28

The principal that buyers will demand more of a product as price drops

Question 29

Business

Answer 29

An organization that seeks to earn profits by providing goods and services.

Question 30

Profit

Answer 30

Expenses - revenue

Question 31

Lobbyist

Answer 31

A person hired by a company or an industry to represent its interests with government officials.

Question 32

Monopoly

Answer 32

A market or industry with only one producer, who can set the price of its product and/or resources.

Question 33

Socialism

Answer 33

The government owns and operates only select major industries.

Question 34

Revenue taxes

Answer 34

Taxes that are levied by governments primary to provide revenue to fund various services and programs

Question 35

Progressive revenue taxes

Answer 35

Taxes that are levied at a higher rate on higher-income taxpayers and at a lower rate on lower income tax payers.

Question 36

Regressive revenue taxes

Answer 36

Taxes that are levied at the same rate regardless of a persons Income.

Question 37

Restrictive taxes

Answer 37

Taxes that are levied to control the product in question.

Question 38

Karl Marx

Answer 38

Communism