Chapter 6 & 7 Unit Test

Question 1

Economics

Answer 1

The study of the production, distribution and consumption of goods and services.

Question 2

Economic System

Answer 2

The way a society organizes the production, distribution and consumption of goods and services. We study 3 economic systems: Market, Mixed, Planned.

Question 3

Economy

Answer 3

The resources and processes involved in the production, distribution and consumption of goods and services.

Question 4

Scarcity

Answer 4

In economics, the idea is that land (materials), labour, and capital (money) limit the supply of what people want and need.

Question 5

Supply

Answer 5

The products and services created by producers.

Question 6

Demand

Answer 6

The wants and needs of consumers for products and services.

Question 7

Producers

Answer 7

Those who create products and services.

Question 8

Consumers

Answer 8

Those who use products and services.

Question 9

Competition

Answer 9

In economics rivalry among producers to sell products to consumers.

Question 10

Private ownership (privately owned)

Answer 10

In economics the part of the economy owned and controlled by businesses and individuals

Question 11

Publicly owned (Public ownership)

Answer 11

In economics the part of the economy owned by government ad paid for by taxes.

Question 12

Public good

Answer 12

What is best for society as a whole.

Question 13

Shift left

Answer 13

A shift on the economic continuum towards more government involvement in the economy.
Usually described as taking a more liberal position.

Question 14

Shift right

Answer 14

A shift on the economic continuum towards less government involvement in the economy.
Usually described as taking a more conservative position.

Question 15

Factors of production

Answer 15

Interact to limit the supply of what people need and want.
Land, Labour, Capital, Entrepreneur
Acronym to use: CELL

Question 16

Capital

Answer 16

All man-made goods used for further production of wealth.
Alternatively, all man-made aids to production, which are
not consumed/or for their own sake, are termed as capital.
It is the produced means of production.
Examples: Raw materials, trucks, tools, factories, machines.

An increase in the capital of an economy means an increase in the
productive capacity of the economy. Logically and chronologically, capital is derived from land and labour and has, therefore, been named
as Stored-Up labour.

Question 17

Entrepreneur

Answer 17

A person who organizes the other factors and undertakes the risks and uncertainties involved in the production.
They hire the other three factors, bring them together, and organize and coordinate them to earn maximum profit.
Example. Mr. X who takes the risk of manufacturing television sets will be called an entrepreneur.
Acts as a boss and decides how the business shall run.

Decides:
“In what proportion factors should be combined.”
“What and where they will produce and by what method”

Loosely identified with the owner, speculator, innovator, inventor and organizer of the business.

Some economists have the opinion there are only 2 factors of production (Land & Labour).
They say land is appropriated from nature’s gift by human labour & entrepreneurs are only a special variety of labour.

Question 18

Land

Answer 18

Refers to all natural resources which are nature’s gifts.
Includes all gifts of nature available to mankind—both on the surface and under.
Ex. Soil, rivers, mines, desserts, rain, air, sun, etc

Question 19

Labour

Answer 19

Human efforts are done mentally or physically with the aim of earning income. (In the process of production)

Question 20

Wages

Answer 20

Compensation given to labourers in return for their productive work or compensation of employees.

Question 21

Inputs

Answer 21

Whatever is used in producing a commodity.
Ex, Producing wheat:
A farmer uses inputs like soil, tractors, tools, seeds, manure, etc.

Classified into 2 groups: Primary input & secondary input

Question 22

Primary Inputs

Answer 22

Called factors of production but also called factor inputs.
Primary inputs = Factors of production = Factor inputs

Land and labour are also known as primary factors of production as their supplies are determined more or less outside the economic system itself.

Question 23

Secondary inputs

Answer 23

Gets merged in the commodity for which they’re used.

Seeds, manure, water & insecticides because they get merged into the commodity for which they’re used.

Known as non-factor inputs
Capital & entrepreneur

Secondary inputs = no-factor inputs

Land = Passive factor; Labour = Active factor

Labour in cooperation with the land makes production possible.

Question 24

Crown Corporation

Answer 24

A company owned by Canada’s government to provide products and services to Canadians.

Reasons to create Crown Corporations:
To provide essential services.
To promote economic development
To support Canadian culture & identity.

Economists say Canada has a mixed economy partly because of its Crown Corporations.
.U.S.A. also has publicly owned corporations (Not as many as Canada).

Ex. Canada Post, the CBC, Canadian Council for the Arts,
VIA Rail, Air Canada used to be

Question 25

3 Questions asked by all economic system

Answer 25

What to produce?
What needs to be made, goods for the common good or unique products that are in demand?

How to produce?
How is that product going to be made?
Is the government going to make
the products for the common good, or is private industry going to make it and sell it for profit?

For whom to produce?
Who is going to get the products; will it be people with money or for the common good?

Question 26

Market Economy

Answer 26

Also known as a free market economy or capitalism.

The economic system of the. U S.
Is associated with the right side of the economic (political) spectrum.

Focuses on private ownership of businesses & less government involvement in the economy.

Less focus on taxation & much more financial freedom.
Entrepreneurs (business owners) are valued in a market economy.
Healthcare is a commodity (something that can be bought/sold) and way less
regulated than in Canada (we have universal healthcare).

The focus is on freedom & individualism.

What to produce?
Goods & services that consumers with money want to buy

How will it be produced?
Produced by private businesses that want to make a profit.

Who will get it?
Consumers with money.

Question 27

Mixed Economy

Answer 27

The economic system of Canada (A combo of private and public ownership of a business).
Like the. U.S. we’ve freedom in the marketplace, but with more taxation/ government regulation.

Taxation then helps to support our public healthcare system, where all
Canadian citizens receive healthcare according to need.

Canada has private businesses (retail stores, most businesses), but also public businesses (Canada Post, the CBC, Canadian Council for the Arts, VIA Rail).

The focus is on equity or fairness.

What to produce?
Consumer goods, as well as basic goods & services needed to ensure people don’t fall below the poverty line.

How will it be produced?
A mix of private businesses (that will be regulated by the government) & publicly owned
businesses (for the common good)

Who will get it?
Consumers with money & those citizens who require their basic needs met.

Question 28

Planned Economy

Answer 28

Involves complete government control of factors of production for the common good.

The focus is on equality, where everyone gets the same, despite their background or experience.

The government makes decisions for citizens, and consumers, choices, a variety of goods and services do not exist.
The government
determines what people need & they have no choice in the matter. There is no freedom, but it does guarantee that people’s basic needs will be met & poverty doesn’t exist.

It’s associated with the former communist countries of Europe & Cuba.

The focus is on equality for the common good.

What to produce?
Basic goods and services, with no consumer goods.

How will it be produced?
Government-owned businesses, with no private ownership.

Who will get it?
Equally distributed to those citizens who require it.

Question 29

Advertising

Answer 29

Stuff that companies do to make people notice and want to buy their products/services.

Question 30

Bandwagon Effect

Answer 30

When people do something just because everyone else is doing it.

Question 31

Boycott

Answer 31

A decision by consumers to stop buying a product or service is a way to bring about change.

Question 32

Budget

Answer 32

A plan for how much money you have and how you’re going to spend it.

Question 33

Consumer Spending

Answer 33

The amount of money people spend on buying stuff.
Total money spent on final goods and services by individuals and households for personal use and enjoyment in an economy.
Plays an important role in mixed and market economies.

Question 34

Consumerism

Answer 34

The idea is that buying and having more stuff makes life better.
An economic theory that links prosperity to consumer demand for goods and services and that makes consumer behaviour central to economic decision-making.

Question 35

Emotional Appeal

Answer 35

Trying to make you feel something so you’ll want to buy something.

Question 36

Glittering Generalities

Answer 36

Using fancy words to make something sound really good, even if it is not that special.

Question 37

Gross Domestic Product (GDP)

Answer 37

All the money made from selling stuff and services in a country in a year.

Question 38

Identity

Answer 38

Who you are, what you believe and what makes you, you.

Question 39

Marketing

Answer 39

Ways companies use to sell their products and make you want them.

Question 40

Plain Folks Appeal

Answer 40

When something is shown as being just like what regular people use or do.

Question 41

Prosperity

Answer 41

When everything is going pretty well, and people have enough money and stuff.

Question 42

Regionalism

Answer 42

When people stick to things from their area or community.

Question 43

Scientific Appeal

Answer 43

Using science stuff to make something seem better or more time.

Question 44

Testimonials

Answer 44

When people say how much they like something to convince others to buy it too.

Question 45

5 Factors that guide consumer behavior

Answer 45

1. Identity
2. Health & Safety
3. Jobs
4. Environment
5. Marketing

Question 46

Identity

Answer 46

Beliefs and values that determine individual choice of products.
What do you consider important to your quality of life?

Question 47

Health & Safety

Answer 47

Influences of health and safety that inform consumer decisions. Some choices are controlled by consumers, others are influenced by the government (Ex. Laws that make products illegal or limit quantities).

Question 48

Jobs

Answer 48

When buying a product, you connect to a chain of people and their jobs.
The consumer’s choice is part of what keeps them employed.

Question 49

Environment

Answer 49

Choices a consumer makes that affect the air, water and land that Canada & .U.S. has laws and programs related to consumer behaviour and the environment.

Ex. Both governments have banned leaded gasoline, because of the harmful effects of lead on human health and the environment

Question 50

Marketing

Answer 50

Strategies to promote products or services, attract customers, and drive sales through different media like television, social media and print.

Both Canada & the United States have legislation that affects what ads can say and can’t (Ex. ads can’t make false or misleading claims about products and services.)

In Canada, rules about advertising come under the Competition Act. The Competition Act aims to uphold competition among producers by ensuring business practices.

Question 51

6 techniques that advertisers use to sell products.

Answer 51

1. Bandwagon Effect
2. Emotional Appeal
3. Glittering Generalties
4. Plain Folks Appeal
5. Testimonials
6. Scientific Appeal

Question 52

Bandwagon Effect

Answer 52

Encourages you to buy a product or service because everyone else is.

Ex. 70% of youth are drinking Nuka
Cola

Question 53

Emotional Appeal

Answer 53

Uses a strong emotional language that connects with your fears and desires.

Ex. $1 from all sales will be donated to children’s charities.

Question 54

Glittering Generalities

Answer 54

Relates the product or service to words or images that promise everything, but deliver little or nothing.

Ex. Fragrance product: “Experience
the magic.”

Question 55

Plain Folks Appeal

Answer 55

Relates a product or service to the experience of ordinary folks.

Ex. “All Canadians have to deal with tax pain.”

Question 56

Testimonials

Answer 56

Uses celebrities or experts to speak for a product.

Ex. -Zendaya’s Shake at Shake Shack
Adidas- Anthony Edwards 1

Question 57

Scientific Appeal

Answer 57

Uses statistics or scientific data to
persuade consumers to buy a product or service.

Ex. ‘9 out of 10 dentists favor
Brushwell toothpaste’