Chapters 1-3 Review

Question 1

Who used his resources wisely to make gunpowder for President Jefferson?

Answer 1

E.I. du Pont

Question 2

separating work into individualized tasks, an idea stressed by Adam Smith

Answer 2

division of labor

Question 3

the difference in value of goods that a country sells abroad compared to those it purchases from other countries

Answer 3

purchasing balance

Question 4

The value associated with any good is directly related to what two tings?

Answer 4

scarcity and utility

Question 5

What type of economy is directed by govenrment?

Answer 5

command economy

Question 6

A __ economy provides barely enough to keep a society alive

Answer 6

subsistence

Question 7

What do some economists list as a fifth factor of production?

Answer 7

information

Question 8

seeks to show the relationship among the various components of an economy

Answer 8

economic model

Question 9

According to economists, the factors of production are ___

Answer 9

scarce

Question 10

an intangible item for which people expect to pay

Answer 10

service

Question 11

What happens to the prosperity of a national economy when the country finds way to produce more goods from existing resources?

Answer 11

the prosperity increases

Question 12

Who was the founder of the Austrian school of economics?

Answer 12

Car Menger

Question 13

economic system that aimed to accumulate stockpiles of gold and silver

Answer 13

mercantilism

Question 14

Diligent work directed by ingenious intelligence allowed to develop under conditions of freedom is the true source of what?

Answer 14

prosperity

Question 15

Who is the person that risks his investment of time and money in the management of an economic enterprise?

Answer 15

entrepreneur

Question 16

a system in which the government controls most of the capital

Answer 16

state capitalism

Question 17

The prosperity and efficiency of the free market economy is owed to what three things?

Answer 17

foundation of limited government; freedom of enterprise and competition; and property rights

Question 18

The study of the choices that individuals and societies make concerning what three activities involving goods?

Answer 18

production, distribution, and consumption

Question 19

an item produces for direct use by consumers

Answer 19

consumer good

Question 20

__ power does not generate greenhouse gases but has significant disposal problems

Answer 20

nuclear

Question 21

What are the four factors of production?

Answer 21

natural resources, labor, capital, entrepreneurship

Question 22

The study of specific components within a major economy

Answer 22

microeconomics

Question 23

What type of economy is directed by customs and habits?

Answer 23

traditional economy

Question 24

the establishment of colonies to benefit a mother country

Answer 24

imperialism

Question 25

material items for which people expect to pay

Answer 25

goods

Question 26

Name some factors for economic growth

Answer 26

efficiency, full employment, economic stability

Question 27

the study of national economics

Answer 27

macroeconomics

Question 28

the worth that consumers attach to a good?

Answer 28

value

Question 29

seek economic growth and stability rather than full employment

Answer 29

Conservatives

Question 30

All people are said to be ___, or people who use goods.

Answer 30

consumers

Question 31

What are the two entities that make the majority of the economic decisions in the free market?

Answer 31

private households and private businesses

Question 32

the amount of a good that is bought at a certain price under certain conditions

Answer 32

demand

Question 33

What term refers to a person that owns a share of some business that produces goods?

Answer 33

capitalist

Question 34

Who was the French group of 18th-century economists who believed the market should be guided by "the rule of nature"?

Answer 34

physiocrats

Question 35

a tool or resource used to produce or distribute goods; a good that is not produced for direct use by end consumers

Answer 35

capital

Question 36

What French phrase, often connected with economics, means "let things alone"?

Answer 36

laissez-faire

Question 37

What type of economy is directed by an "invisible hand"?

Answer 37

free market economy

Question 38

What are taxes that governments apply only to imported goods?

Answer 38

tariffs

Question 39

Who wrote *The Wealth of Nations*?

Answer 39

Adam Smith

Question 40

refers to the quantity of a good for sale at a certain price under certain conditions

Answer 40

supply

Question 41

What type of economy would a Communist-controlled country have?

Answer 41

command economy

Question 42

mechanism through which people exchange goods

Answer 42

market