Economic systems

Question 1

The study of individuals, families, and businesses in the economy

Answer 1

Microeconomics

Question 2

The study of the economy as a whole; concerned with large-scale economic activity

Answer 2

Macroeconomics

Question 3

Studies economic behavior as it is

Answer 3

Positive economics

Question 4

Judgements of what economic behavior ought to be

Answer 4

Normative economics

Question 5

What are the three basic economic questions?

Answer 5

What are we producing?
How are we going to produce it?
Who are we producing it for?

Question 6

The way a society uses its scarce resources to satisfy its people’s unlimited wants

Answer 6

Economic system

Question 7

Basic economic system in which families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down from generation to generation

Answer 7

Traditional Economy

Question 8

Economic system in which the govt decides what goods and services will be produced, how they will be produced, and how they will be distributed

Answer 8

Command economy

Question 9

Economic system based on individual choice, not govt directives

Answer 9

Market Economy

Question 10

System by which the govt of the homeland controlled trade with its colonies

Answer 10

Mercantilism

Question 11

Wrote Wealth of Nations, and is considered the father of Economics

Answer 11

Adam Smith

Question 12

A system in which the society’s leaders make all economic decisions

Answer 12

Centrally planned economy

Question 13

Economic system in which the govt owns some or all of the factors of production

Answer 13

Socialism

Question 14

Economic system in which the govt owns all the factors of production and there is little or no political freedom

Answer 14

Communism

Question 15

System which requires absolute obedience to those in power

Answer 15

Authoritarian System

Question 16

Economic system in which the govt owns the basic industries, but other industries are privately owned; Established through the democratic political process rather than through the violent overthrow of the govt

Answer 16

Democratic Socialism

Question 17

Who published The Communist Manifesto, which laid out the ideas of worker overthrow?

Answer 17

Karl Marx

Question 18

The publisher of The Communist Manifesto stated that the Industrial Revolution had created a system of _______________

Answer 18

Wage Slavery

Question 19

The rights of individuals and groups to own businesses and resources; necessary to make markets work properly

Answer 19

Private property rights

Question 20

Any place where people buy and sell goods and services

Answer 20

Market

Question 21

___________ is vital to any sale or exchange

Answer 21

Clear ownership

Question 22

The principle that the govt should not interfere in the economy

Answer 22

Laissez faire

Question 23

An economic system that is based on private ownership of the factors of production

Answer 23

Capitalism

Question 24

A market economy in its pure form

Answer 24

Laissez faire capitalism

Question 25

A trade in which both traders believe that what they are getting is worth more than what they give up

Answer 25

Voluntary exchange

Question 26

____________ is considered a financial gain from a business transaction

Answer 26

Profit

Question 27

The effort of two or more people, acting independently, to get the business of others by offering the best deal

Answer 27

Competition

Question 28

________ guides voluntary exchanges

Answer 28

Self-interest

Question 29

The idea that because consumers are free to purchase what they want and refuse products they do not

Answer 29

Consumer sovereignty

Question 30

A situation in which people concentrate their efforts in the areas in which they have an advantage

Answer 30

Specialization

Question 31

A tool that economists use to understand how market economies operate

Answer 31

Circular flow model

Question 32

The market for goods and services is called the _________

Answer 32

Product market

Question 33

The market for the factors of production

Answer 33

Factor market

Question 34

Insures that resources will be allocated efficiently, since inefficiencies would result in lower profits

Answer 34

Profit motive

Question 35

An economy that has elements of traditional, command, and market systems

Answer 35

Mixed economy

Question 36

Which economic system dominates the US?

Answer 36

Market economy

Question 37

To change from private ownership to govt or public ownership

Answer 37

Nationalize

Question 38

To change from govt or public ownership to private ownership

Answer 38

Privatize

Question 39

All the economic interactions that cross international boundaries

Answer 39

Global economy