Chapter 2 Flashcards

(35 cards)

0
Q

the income people receive in return for supplying factors of production

A

factor of payment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

the structure of methods and pronciples that a society uses to produce and distribute goods and services

A

economic system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

profit

A

the amount of money a business receives in excess of its expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

a set of government programs that protect people who face unfavorable economic conditions

A

safety net

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

level of economic prosperity

A

standard of living

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

the process of bringing new methods, products, or ideas into use

A

innovation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

traditional economy

A

an economic system that relies on habit, custom, or ritual to decide that three key economic questions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

any arrangement that allows buyers and sellers to exchange things

A

market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

the concentration of the productive efforts of individuals and businesses on a limited number of activities

A

specialization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

free market economy

A

an economic system in which decisions on the three key economic questions are based on voluntary exchange in markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

a person or gorup of people living in a single residence

A

household

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

an organization that uses resources to produce a product or service, which it then sells

A

firm

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

the arena of exchange in which firms purchase the factors of production from households

A

factor market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

the arena of exchange in which households purchase goods and services from firms

A

product market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

an individuals own personal gain

A

self-interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

the hope of reward or fear of penalty that encourages a person to behave in a certain way

16
Q

the struggle among producers for the dollars of consumers

17
Q

a term coined by Adam Smith to describe the self-regulating nature of the marketplace

A

invisible hand

18
Q

the power of consumers to decide what gets produced

A

consumer sovereignty

19
Q

centrally planned economy

A

an economic system in which the government makes all decisions on the three key economic questions

20
Q

command economy

A

another name for a centrally planned economy

21
Q

socialism

A

a range of economic and political systems based on the belief that wealth should be distributed evenly throughout a society

22
Q

communism

A

a political system in which the government owns and controls all resources and means of production and makes all economic decisions

23
Q

describes a form of government that limits individual freedoms and requires strict obedience from its citizens

A

authoritarian

24
the doctrine that government generally should not intervene in the marketplace
laissez faire
25
private property
property that is owned by individuals or companies, not by the government or the people as a whole
26
a market- based economic system in which the government is involved to some extent
mixed economy
27
a period of change in which a nation moes from one economic system to another
economic transition
28
privatization
the process of selling businesses or services operated by the government to individual investors, and then allowing them to compete in the marketplace
29
an economic system characterized by private or corporate ownership of capital goods
free enterprise system
30
infrastructure
the basic facilities that are necessary for a society to grow
31
public property
property that is owned by the government or the people as a whole
32
3 decisions (key economic questions)
what and how much to produce? who receives the goods and services how the products should be
33
list and briefly explain the five basic goals and societal values that influence the three basic economic questions
economic efficiency - maximize production with the resources you have economic freedom economic security - safety net economic equality - what is fair
34
advantages of the free market
efficiency economic freedom economic growth