Chapter 2

Question 0

Economics

Answer 0

The study of how society uses it’s scarce resources to produce and distribute goods and services

Question 1

Economy

Answer 1

The sum total of all the economic activity within a region

Question 2

Microeconomics

Answer 2

The study of how consumers, businesses and industries collectively determine the quantity of goods and services demanded and supplied at different prices

Question 3

Macroeconomics

Answer 3

Study of the big picture issues in an economy including competitive behavior among firms, the effect government policy and overall resources

Question 4

Natural resources

Answer 4

Land, forests, minerals, water and other tangible assets useable in their natural states

Question 5

Human resources

Answer 5

People who work in organization on its behalf

Question 6

Capital( finance)

Answer 6

Funds that finance operations of business as well as physical, human made elements used to produce goods and services such as factories and computers

Question 7

Knowledge (info resources)

Answer 7

Expertise gained through experience or association

Question 8

Entrepreneurship

Answer 8

Combination of innovation, initiative and willingness to take the risks required to create and operate new business

Question 9

Impact of scarcity

Answer 9

1. It creates competition for resources

2. It forces trade off on the part of every participant in the economy

Question 10

Opportunity cost

Answer 10

The value of the most appealing alternative not chosen

Question 11

Communism

Answer 11

State ownership of all major productive absence of economic class

Question 12

Socialism

Answer 12

State ownership of certain products, resources manage efforts to minimize dramatic differences between economic classes
Opportunity for entrepreneurship with varying degrees of restriction

Question 13

Capitalism

Answer 13

Private ownership of most products and resources
Few efforts to minimize differences between economic classes
Government policies support entrepreneurship

Question 14

Free market system

Answer 14

Economic system which decisions about what to produce and in what quantities are decided by market and sellers

Question 15

Planned system

Answer 15

An economic system in which the government controls most of the factors of production and regulates their allocation

Question 16

Nationalization

Answer 16

Governments take over of selected companies or industries

Question 17

Privatization

Answer 17

Turning over services once performed by the government and allowing private business to perform them instead

Question 18

Demand

Answer 18

Buyers willingness and ability to purchase products at various price points

Question 19

Supply

Answer 19

A specific quantity of a product that the seller is able and willing to provide at various prices (determines demand)

Question 20

Equilibrium point

Answer 20

The point where quantity and supply equals quantity demand (because the supply and demand curve are dynamic so is the equilibrium point)

Question 21

Competition

Answer 21

Rivalry among businesses for same customers

Question 22

Pure competition

Answer 22

A situation in which so many buyers and sellers exist that no single buyer or seller can individually influence market prices

Question 23

Monopoly

Answer 23

A situation in which one company determines a market to the degree it can control prices

Question 24

Monopolistic competition

Answer 24

A situation in which many sellers differentiate their products from those competitors in at least some small way

Question 25

Oligopoly

Answer 25

A market sit intubation in which a very small number of suppliers sometimes only two provide a particular good or service

Question 26

Recession

Answer 26

A period during which national income, employment and production all fall at least six months of decline in GDP

Question 27

Business cycle

Answer 27

Fluctuation in the rate of growth that an economy experiences over a period of several years

Question 28

Unemployment rate

Answer 28

The portion of labor forces currently without a job

Question 29

Inflation

Answer 29

Economic condition when prices rise steadily throughout the economy

Question 30

Deflation

Answer 30

Economic condition in which prices fall steadily throughout the economy

Question 31

Government roll in free market

Answer 31

1. Protect stakeholders 2. Fostering competition 3. Encouraging innovation and economic development 4. Stabilizing and stimulating the economy

Question 32

Regulation

Answer 32

Relying on law policies than on market forces to govern economic activity

Question 33

Deregulation

Answer 33

Removing regulations allow the market to prevent excess and correct it's self

Question 34

Monetary policy

Answer 34

Government policy and actions taken by federal reserve board to regulate the nations money supply

Question 35

Fiscal policy

Answer 35

Strategy for the use of government revenue collections and spending to influence business cycle

Question 36

Economic indicators

Answer 36

Statistics that measure the performance of the economy

Question 37

Consumer price index

Answer 37

A monthly statistic that measures changes in the prices of a representative collective of consumer goods

Question 38

Producer price index

Answer 38

A statistical measure of price trends at the producer wholesaler level

Question 39

Income tax

Answer 39

Income earned by people and businesses largest source of governments revenue

Question 40

Real property taxe

Answer 40

Assessed value of land and structures owned by business and people

Question 41

Sales tax

Answer 41

Tax collected by retail business at time of. Purchase

Question 42

Excise tax

Answer 42

Sin tax example cig gas liquor

Question 43

Payroll tax

Answer 43

Social security, Medicare and unemployment , company matches employee contributions

Question 44

Consumer price index CPI

Answer 44

A monthly statistic that measures changes in the prices of a representative collective of consumer goods

Question 45

Producer price index PPI

Answer 45

A statistical measure of price trends at the producer and wholesaler levels