Chapter 1 Economic Problem

Question 1

Limited nature of resources?

Answer 1

Scarcity

Question 2

Three types of Economic Resources

Answer 2

Natural, Capital and Human

Question 3

Types of Economics?

Answer 3

Micro and Macro

Question 4

Includes raw materials such as minerals and forests and not only land

Answer 4

Natural Resources

Question 5

basic items that are used in all types of production

Answer 5

Economic resources

Question 6

Human effort employed directly in production

Answer 6

Labour

Question 7

is the initiative, risk-taking, and innovation necessary for production

Answer 7

entrepreneurship

Question 8

the processed materials, equipment, and buildings used in production

Answer 8

Capital

Question 9

When a natural resource is employed, its owner receives a ____, which is a payment for supplying the resource

Answer 9

rent

Question 10

The study of how to distribute limited resources to make choice

Answer 10

Economics

Question 11

the behaviour of individual participants in various markets.

Answer 11

Microeconomics

Question 12

the branch of economics that takes a wide-ranging view of the economy, studying the behaviour of economic sectors

Answer 12

macroeconomics

Question 13

generalizations about or simplifications of economic reality; also known as laws, principles, or theories

Answer 13

economic models

Question 14

allows economists to see the forest instead of the trees.

Answer 14

a good economic model

Question 15

factors that have measurable values

Answer 15

variable

Question 16

the variable in a causal relationship that causes change in another variable

Answer 16

independent variable

Question 17

the variable in a causal relationship that is affected by another variable

Answer 17

dependent variable

Question 18

An increase in cell phone prices that reduces the number of phones sold is an example of what kind of relationship

Answer 18

inverse relationship

Question 19

a change in the independent variable causes a change in the same direction of the dependent variable

Answer 19

direct relationship

Question 20

the assumption all other things remaining the same

Answer 20

ceteris paribus

Question 21

two types of economic inquiry??

Answer 21

positive and normative economics

Question 22

normative economics is also called?

Answer 22

policy economics

Question 23

the study of how the economy ought to operate

Answer 23

normative economics

Question 24

other term for positive economics?

Answer 24

descriptive economics

Question 25

It is based purely on economic facts rather than on opinions

Answer 25

Positive economics

Question 26

the study of economic facts and why the economy operates as it does

Answer 26

positive economics

Question 27

include causal relationships between variables and are based on simplifying assumptions.

Answer 27

Economic models

Question 28

it highlights variables such as unemployment, inflation, and total output

Answer 28

Macroeconomics

Question 29

employing scarce resources in a way that derives the highest benefit

Answer 29

economic efficiency

Question 30

is an important national goal because it helps to raise the average standard of living for Canadians

Answer 30

Economic growth

Question 31

a summary of all transactions between Canadians and foreigners that involve exchanging Canadian dollars for other currencies

Answer 31

balance-of-payments accounts

Question 32

how many countries have signed the Kyoto protocol in 1997, that is an attempt that have been made by countries globally to deal with climate change

Answer 32

170

Question 33

Every country must answer three basic economic questions

Answer 33

what to produce, how to produce, and for whom to produce.

Question 34

rely on private property and the operation of markets

Answer 34

Market economies

Question 35

depend on publicly owned property and central planning.

Answer 35

Command economies

Question 36

7 main goals of Canadian economy?

Answer 36

economic efficiency, income equity, price stability, full employment, a viable balance of payments, economic growth, and environmental sustainability

Question 37

the organization of an economy, which represents a country’s distinct set of social customs, political institutions, and economic practices

Answer 37

economic system

Question 38

an economic system in which economic decisions are made on the basis of custom

Answer 38

traditional economy

Question 39

individuals are free to pursue their own self-interest.

Answer 39

Market economy

Question 40

an economic system based on private ownership and the use of markets in economic decision-making

Answer 40

market economy

Question 41

a set of arrangements between buyers and sellers of a certain item

Answer 41

market

Question 42

markets in which consumer products are traded

Answer 42

product markets

Question 43

markets in which economic resources are traded

Answer 43

Resource markets

Question 44

the effect of consumer needs and wants on production decisions

Answer 44

consumer sovereignty

Question 45

Placing markets at the centre of economic activity can have benefits. The main benefits are associated with??

Answer 45

consumer sovereignty and innovation

Question 46

The main drawbacks of a market economy are associated with...

Answer 46

income distribution, possible market problems, and potential instability

Question 47

Opposite to a market economy

Answer 47

Command Economy

Question 48

an economic system based on public ownership and central planning

Answer 48

command economy

Question 49

is the kind of economy in which all productive property—natural resources and capital—is in the hands of government, and markets are largely replaced by central planning.

Answer 49

command economy

Question 50

The reliance on planning rather than markets gives command economies some possible benefits related to... ?

Answer 50

income distribution and economic growth.

Question 51

Command economies also have serious drawbacks related to... ?

Answer 51

planning, efficiency, and individual freedom.

Question 52

an economic system that combines aspects of a market economy and a command economy; production decisions are made both in private markets and by government

Answer 52

modern mixed economy

Question 53

economic systems in which a traditional sector co-exists with modern sectors

Answer 53

traditional mixed economies